Nidhi Company in India: Advantages, Features & registration

Nidhi company is one type business structure in form of non-banking financial company (NBFC) incorporated under Section 406 of the Companies Act, 2013. The Company deals only with their shareholder/members, hence they have been exempted from the core provisions of the RBI Act and other directions applicable to NBFCs. However, RBI is empowered to issue directions to this type of Company in matters relating to their deposit acceptance activities. This business model is ideal for Financial and Banking Services as are exempt from various Regulations. This is also popular in South India and are highly localized single office institutions. Yes, You can carry on the business in chit fund management, hire purchase finance or leasing finance, insurance, or the acquisition of securities issued to you by any corporate entity Issue preference shares, debentures, or any other form of a debt instrument in any name or form Open any existing account with its members Buy or acquire securities of another company, control the composition of the Board of Directors of other companies in any way or make any arrangements for the management change. Noted: The Main object of Nidhi Company is to make savings amongst its members, receiving deposits from and lending money to its members for their mutual benefit. You can't operate any other business than that of borrowing or lending under your name. If Nidhi has complied with all these rules, they may rent lockers to their members. However, the rental income from such facilities must not exceed twenty percent. at any time in a financial year, the Nidhi gross income Accept deposits from and lend to anyone other than its members Any of its members' assets can be pledged as security You can make deposits or lend money to any company Involve in any partnership agreement for its borrowing and lending activities Issue or cause to issue any advertisement in any form soliciting deposits Except that the members are not allowed to circulate details of fixed deposit plans to them, the Nidhi members will be able to read the words "for private circulation to members" and it will not be considered an advertisement for soliciting deposits. Any brokerage fees or incentives paid to members for mobilizing deposits or for the deployment of funds, or for granting loans. For loan advances to Nidhi members, you can borrow money from banks and financial institutions. The following person cannot be member of company The following steps are involved in incorporating the company in India: Form INC-20A: Nidhi's company must complete an INC-20A form with ROC within 180 days of incorporation with proof of the subscription amount payment. Each Nidhi Company must complete NDH-4 within 60 calendar days of expiration, one year after the date of incorporation, along with the following attachments. The company shall designate a Chartered Accountant as Auditor within 30 days of the day of incorporation. Nidhi Company must fulfil all of the following conditions within a year from the date of incorporation. Nidhi Company shall file form NDH-1 along with ROC within ninety days of the conclusion of the first year's financial year following incorporation, along with the fees as specified in the companies (Registration Offices and Fees) Rules 2014. Today, Nidhi Company is a well-known lending company for secured loans. It is a type of lending company that lends money to its members. NIDHI stands for National Initiative for Developing and Harnessing Innovations. It can be described as a financial institution or a type of NBFC that lends money to its members. The Companies Act, 2013, has registered this company. It is managed according to the RBI's guidelines. All transactions are made by the company's members. All transactions are directed at the shareholders of Nidhi Company. RBI has exempted notified Nidhi businesses from core acts. This distinguishes Nidhi companies and other NBFCs. The Ministry of Corporate Affairs (MCA), which started Nidhi companies, is affiliated with them. The primary purpose of incorporating this business structure was to motivate and encourage its members to save, so they can easily meet their financial needs. This Company is founded on the principle of mutual benefits. Remember that Nidhi Companies are subject to the RBI's jurisdiction since their function is very similar to NBFCs. Additionally, the Companies Act (2013), Section 406 deals with the registration and management of Nidhi Companies. "Nidhi" and "Mutual Benefit Society", are companies that the Central Government may declare, through a notification in the Official Gazette to the Official Gazette, to be a Nidhi, or Mutual Benefit Society. Details About Nidhi Company Registration in India
Features Of Nidhi Company Incorporation
Is There Any Restriction On Nidhi Company's Activities?
Prerequisites for Incorporation of Nidhi company
Documents Required For Nidhi Company
Member of Nidhi Company in India
Procedure for Incorporating a Nidhi Company
Step 1: Application for Name Reservation
Step 2: Application for Digital Signature of Directors (DSC)
Step 3: File the Application for Incorporation
Post-Incorporation Conformances:
Formula NDH-4
Appointment Of An Auditor
Formula NDH-1
Points To Be Remembered…