Description

Nidhi Company: Promoting Savings and Mutual Benefits

A Nidhi Company is a unique type of Non-Banking Financial Company (NBFC), governed by the Companies Act, 2013 and regulated by the Nidhi Rules, 2014. Though it resembles a Public Limited Company in structure, its primary purpose is to cultivate the habit of thrift and savings among its members and provide loans to them at reasonable interest rates.

Also referred to as a Mutual Benefit Company, a Nidhi Company operates on the principle of mutual benefit, functioning exclusively within its group of members.

Key Features of a Nidhi Company

✅ Community-Based Financial System

• A Nidhi Company operates only among its members.
• Accepts deposits and provides loans only to shareholding members, creating a close-knit financial community.

✅ Deposit & Lending Mechanism

• Collects money from members as fixed, recurring, or savings deposits.
• Provides loans at lower interest rates compared to regular financial institutions.
• Encourages financial discipline and self-reliance among individuals.

✅ Membership Requirement

• Minimum of 7 members and 3 directors are required to incorporate a Nidhi Company.
• Any person can become a member by subscribing to at least one share of the company.

✅ Capital Requirement

• A minimum authorized capital of ₹5 lakhs is required to incorporate a Nidhi Company.

✅ Legal Framework

• Incorporated under Section 406 of the Companies Act, 2013.
• Governed by the Nidhi Rules, 2014 issued by the Ministry of Corporate Affairs.

Eligibility & Applicability

The Nidhi Rules, 2014 apply to:

1. Every company declared as a Nidhi or Mutual Benefit Society under Section 620A(1) of the Companies Act, 1956.
2. Companies functioning like Nidhi Companies but awaiting formal notification.
3. Companies incorporated as Nidhi Companies under Section 406 of the Companies Act, 2013.

Advantages of a Nidhi Company

• 💰 Encourages Savings: Promotes savings habits among members for long-term financial security.
• 🏦 Easier Loan Access: Members can borrow funds easily with fewer formalities.
• 👥 Low Operational Risk: Loans and deposits are restricted within the member circle, minimizing risk.
• 📈 Simple Structure: Fewer regulatory complexities compared to other NBFCs.
• 🤝 Mutual Benefits: Built entirely on the foundation of member participation and collective welfare.

Penalty for Non-Compliance

In case of violation of the Nidhi Rules:

• A fine up to ₹5,000 may be imposed on the company and defaulting officers.
• If the contravention continues, a further fine of ₹500 per day may apply until the issue is resolved.

Who Should Start a Nidhi Company?

A Nidhi Company is ideal for:

• Communities, societies, or associations promoting mutual savings
• Entrepreneurs wanting to start a community-based finance model
• Groups looking to formalize their internal lending and deposit system

Register Your Nidhi Company with GST Suvidha Centre

GST Suvidha Centre offers expert assistance for the hassle-free registration of Nidhi Companies, including legal documentation, compliance support, and post-registration guidance.

💼 Our Services Include:

• Name Approval (RUN)
• Director Identification Number (DIN) & Digital Signature Certificate (DSC)
• Drafting and Filing of MoA & AoA
• Filing of Incorporation Forms (SPICe+)
• PAN & TAN Registration
• Guidance on post-incorporation compliance

📞 Get Started Today with the Experts at GST Suvidha Centre

Join hundreds of successful Nidhi Companies. Build your own member-focused financial system with expert guidance.

✅ Visit your nearest GST Suvidha Centre or book a consultation online today!

 

Required Documents

• PAN Card of Members
• TAN Number Of Company
• Board Resolution To Open Bank Account
• Photographs of Directors and Members
• Digital signature Certificates
• Aadhar or Voter Card of Members
• Address Proof of Directors
• DIN of Directors
• Address Proof of Registered Office
• MOA and AOA of the Company
• MCA Form Attestation
• Share certificate