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People often thinks to start a New Nidhi Company, they should have known first- WHAT IS A NIDHI COMPANY?
A Nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act 2013. Their core business is borrowing and lending money between their members. Examples of a Nidhi Company are permanent funds, mutual benefit funds, a mutual benefit company and benefit funds. In simple words, Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.
Nidhi company registration online is simple and less complex as compared to other types of finance companies like NBFC which require RBI license to start. A nidhi company can be started with an initial capital of Rs.5 lakh and requires at least seven people to start with (minimum 7 members). Nidhi company registration also requires three directors initially. Every promoter or director needs a copy of PAN card, ID proof and address proof to apply for a Nidhi company in India.
Have look on a Short Video related to all about Nidhi Company Registration
New Nidhi Company can’t deal with chit funds, hire-purchase finance, leasing finance, insurance or securities business. It is strictly prohibited from accepting deposits from or lending funds to, any other person except members.
It is constituted for sole purpose of helping its members. It is formed for mutual benefit.
Registration of New Nidhi Company instills the feeling of savings and thriftiness among its members.
The investments are secured and lucrative.
New Nidhi Company doesn’t require an RBI license.
New Nidhi Company shall, within a period of one year, ensure that it has-
A Nidhi Company typically falls in the category of “Non-Banking Financial Companies (NBFCs)”, which does not require any license or registration from the Reserve Bank of India (RBI). It is formed for the sole purpose of accepting deposits (saving) and lending loans to it's members only. It works through it's members only.
The Nidhi company must be registered as a Public Limited Company, under the Companies Act, 2013. This essentially means that there are at least 3 Directors and 7 Shareholders (as mentioned above also). Further, it's MoA (Memorandum of Association) must state that the main objective of the proposed company is to promote thriftiness and a habit of savings among it's members.
Not at all, RBI exempted Nidhi Company from taking license for providing services of lending and accepting money from or to its members.
The answer is Yes, you can IFSC in Nidhi company. But, RBI does not allot IFSC to NIDHI company directly which means Nidhi Company needs to arrange IFSC services in an indirect way.
No, the Cheque book facility is available only for Banks. Nidhi Company can not provide cheque book facility to its members.
Yes, Nidhi Company can issue passbooks to its member to keep the record of entries of their deposits.
A Nidhi company is classified at present as a "Mutual Benefit Financial Company" by RBI and regulated by the Bank for its deposit-taking activities and by DCA for its operational matters as also the deployment of funds. However there is no condition to take any license from RBI. Mainly it gets regulated from Ministry of Corporate Affairs.
Nidhi Company can have funded through the deposits in the form of Saving Deposits, Recurring Deposits, and Fixed Deposits. Loans are generally not available to Nidhi Company in India
GST is not applicable on the interest part of the business, however, if Nidhi Company persists in any other business income then GST will apply as per the applicable laws.
If the director of the Nidhi Company holds equity shares of the company then he can avail of the loan from such Nidhi Company (as per the normal course of business). Also, a director can lend money to the Nidhi Company out of his earned income.
No, Nidhi company can not provide an unsecured loan to its members. For providing unsecured loans you might consider Micro Finance Company Registration Service.
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