Nidhi companies are just like Public Limited Companies but have the word Nidhi before Limited. Nidhi companies are allowed to borrow from their members and lend to their members. Therefore, the funds contributed to a Nidhi company are only from its members (shareholders). They are created primarily for the motive of cultivating the habit of thrift and savings among their members.
Main Business of Nidhi Company
Nidhi Companies are registered Limited Companies involved in taking deposits and lending to its member. Nidhi Companies ONLY deal with shareholder-members money, RBI has exempted Nidhi Companies from the core provisions of the RBI and other regulations applicable to an NBFC.
Features Of Nidhi Company
- Borrow from and lend only to members
- Incorporate as Public Limited Company
- Not Required to register with RBI
- Minimum 7 Members, 3 Directors
- Rs. 5 Lakh Capital
Requirements For Nidhi Company
- Compliances to be made after One Year of Incorporation
- Unencumbered term deposits of not less than 10 percent
- Net Owned Fund of Rs.10 Lakhs or More Minimum 200 Members
- Net Owned fund to deposits ratio, not more than 1: 20
Fast, Easy & Hassle-Free A Nidhi Company
- Pick your Company Name
- Pay the Registration Fees
- Upload Documents
Restrictions on Nidhi Company
- Shall not able to carry the business of Chit Fund, Hire Purchase, leasing finance, insurance or acquisition of securities issued by anybody corporate;
- Shall not issue preference shares, debentures, or any other debt instrument
- Shall not acquire another company by purchase of securities or control the composition of the Board of Directors.
- Shall not carry on any business other than the business of borrowing or lending in its own name Shall not accept deposits from or lend to any person, other than its members
- Shall not take deposits from or lend money to any body corporate;
- Shall not issue or cause to be issued any advertisement in any form for soliciting deposit:
- Shall not pay any brokerage or incentive for mobilizing deposits from members or for the deployment of funds or for granting loans.
- Shall not be able to provide any current account services.
To know about Public Limited Company Registration click on this link