Nidhi company is a member-only organisation that allows to take deposits and lend money to its members only. Examples of a Nidhi Company are permanent funds, mutual benefit funds, a mutual benefit company and benefit funds. RBI has exempted the notified Nidhi companies from the core provisions of the RBI Act and other directions applicable to a NBFCs. Therefore, Nidhi Company is an ideal entity to obtain cash deposits from members or contribute to them, for the common gain of the two parties. registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings. Register a Nidhi company for your lending-deposit business.
Documents of Partners:
Address Proof (Office) :
Excludes Foreign National or Foreign Body corporates as partners or activities that need approval from RBI, SEBI or IRDA. For LLP with FDI, refer to Foreign Subsidiary in India.
Cheaper To Borrow: As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.
Encourages Savings: It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi Company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.
Fewer Complications:Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A Nidhi Company enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves.
The conditions laid down by the Act says that a Nidhi Company should acquire a minimum of 200 members within its first year of incorporation. However, in case the company is not able to meet the required numbers, it can apply for an extension with the necessary government authorities.
No, members are only allowed to deposit, borrow, or lend funds.
Any person can deposit, lend or borrow money through the provisions provided by the Companies Act, 2013. Hence, they can all become members of a Nidhi Company. provided they are not a corporation or a company.
A Nidhi Company can accept deposits not exceeding 20 times of its net owned assets, as per the last audited statements.