Nidhi is a Hindi word, which means finance or fund. So, Nidhi Company can be defined as bank where only its members can deposit money or take loan. It is kind of mutual benefits society in India in the form of a company. Since Nidhi companies are registered as public limited companies; therefore, it has all the features of public limited companies such as limited liability of its members.
The main thrust to register Nidhi Company in India is to promote the saving habits among its members for their mutual benefits.
Nidhi Company has following features:
-Public Company: It has to be registered as a public company.
-Capital: Minimum paid up equity share capital shall be of Rs. 5 Lakh.
-Object: Nidhi shall have object of promoting the habit savings amongst its members in its MOA.
-Minimum Members: It must not have less than 200 members.
Why Nidhi Company:
If you want to start your business in financing industries, then it is the best vehicle to kick start your plan. Though Nidhi Company comes under the broad category of NBFCs (Non-banking Financial Companies), yet it is exempted from stringent regulatory compliances, which otherwise you have to follow if you start NBFCs. It is beneficial to raise money within tightly-knit groups.
Since Nidhi company gives a loan to its members, only if members provide some sort securities such as Gold, silver, jewellery, properties or any type of financial securities e.g. FD receipts, National Saving Certificates (NSCs) etc., so this mechanism protects the risk if some members fail to pay back money borrowed.
Documents required to incorporate Nidhi Companies in India:
Following are the documents required for company incorporation for each director/ shareholder
-Self attested PAN card copy.
-Self attested copy of any one of the Identity Proof like Driving License, Passport, Voter ID & Adhaar Card
-Self attested copy of any one of the Address Proof like Bank Pass Book/ Bank Statement, Telephone Landline Bill, Mobile Bill & Electricity Bill
-Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill, AND Rent Agreement (if rented) AND NOC for doing Business & for taking Registration.