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In this post we shall cover the various frequently asked questions (FAQs) on Nidhi Company. These companies come under the class of NBFCs and don’t require a RBI license. Let’s now know more about it.
Table of Contents
Ans.: A Nidhi Company is a Company which carries on the business of accepting deposits and lending the same on demand. Nidhi Company is similar to NBFC but the only basic difference between the two is that Nidhi Companies accept deposits only from its members.
The main aim of these companies is to work for the mutual benefit of its members. These companies are not entitled to carry on the business of Hire Purchase Financing, Insurance, Chit Funds, and Acquisition of securities or Issue of any Debt Instruments.
Ans.: Following provisions are applicable to Nidhi Companies.
Ans.: Nidhi Company Registration it is to be registered as a Public Limited Company. So, to incorporate a Nidhi Company it is necessary to fulfill following criteria:
Below in this post (FAQs on Nidhi Company); we have discussed post incorporation requirements.
Ans.: Once the Nidhi Company is incorporated it must fulfil the following requirements:
Ans.: The exclusive advantage which is offered by Nidhi Companies are:
Ans.: Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. The Nidhi Company compulsorily abide by the rules of Central Government.
Ans.: The Nidhi Company uses the funds in lending to shareholders as per Nidhi Rules. It lends such money in the form of small loan for business and finance.
Ans.: Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.
Ans.: We have specified the relevant documents in this FAQs on Nidhi Company. Following are the documents required for Nidhi Company Registration:
Ans.: Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan.
Ans.: Nidhi Companies are not allowed to do the following business:
The registration of Nidhi Company can be done through online mode. The application for the same can be filed and fees can also be submitted to register this company. Hopefully the FAQs on Nidhi Company answer some of the common queries on this company. For any additional information, contact Enterslice.
Read our article: Nidhi Company Registration: A Complete Guide
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