A company can be started in the USA either in the form of a ‘Corporation’ or ‘Incorporate...
NIDHI stands for National Initiative for Developing and Harnessing Innovations. Nidhi in Hindi means funds or finance. The Nidhi Company is majorly formed to do transactions which involve thrift of funds and reserve funds amongst the members; they also receive deposits and lending to members for benefits.
A Nidhi Company is a type of a non-banking financial institution. It is governed under Section 406 of the Companies Act 2013. Section 406(1) of the Companies Act defines Nidhi Company as a mutual benefit society, which the Central Government by notification has declared to be Nidhi Company. The government, by a notification, releases that particular business cannot be continued by the Nidhi Company or it does not apply to it.
The transactions of the company are regulated as per RBI guidelines.
The only condition attached to Nidhi Company is a ceiling of interest rate payable to members on the deposits with them. The current rate of interest on the deposit is 2 percent.
One Person Company
SEC 2(62) OF COMPANIES ACT 2013 defines One Person Company as a Company in which there is only one person who is a member/shareholder/director. This one person occupies all the positions.
The nominee appointed has to be a natural person. This natural person will be one who is a resident of India and has Indian citizenship. There has to be written consent of the nominee, and approval has to be given voluntarily.
In order to have a better understanding of the concept that which is a better option, the chart illustrates the differences between the two:
|SL.N.||Particulars||Nidhi Company||One Person Company|
|1.||Registered under||Companies Act||Companies Act|
|2.||Minimum Share Capital required||Rs 5,00,000||Rs 1,00,000|
|3.||Object clause||Only lending and borrowing of deposits between members||Object clause is the same as that of a public or private company|
|4.||Membership||Must not have less than 200 members||Minimum members can 1and maximum 2.|
|5.||Nominee member/director||Not required||Must have nominee director, for the perpetual continuance of the firm that is n case of death or disease.|
|6.||Net Owned Funds to deposits ratio||Required in the ratio of 1:20.||Not required|
|7.||Private company||NBFC is a type of public limited company but cannot do any business other than of NBFC||It is a private company. But OPC cannot be a Nidhi Company.|
|8.||Name of the company||Must have prefixed Nidhi Company||Must have prefixed word OPC in its name.|
|10.||Conversion||No||Can never be converted into section 8 and NBFC|
|11.||Application of rules||Nidhi company rules 2014 and companies Act 2013||Companies Act 2013|
It can be concluded that after comparing the OPC and Nidhi Company, both are different types of companies under the Companies Act, 2013. The companies Act, 2013 defines Nidhi under 406 and OPC under section 2(62). The Nidhi Company in India is one particular public limited company that is governed under the supervision of RBI and as per the Companies Act, 2013. The companies Act, 2013 has clearly laid down that a One Person Company can never be converted into Section 8 and in the Nidhi Company. There is no similarity between these companies. The only similarity is that the provisions related to the Companies Act, 2013 would be applicable to both these companies.
Read our article:One Person Company V/S Private Limited Company: Quick Comparison