Advisory Services
Audit
Consulting
ESG Advisory
RBI Registration
SEBI Registration
IRDA Registration
FEMA Advisory
Compliances
IBC Services
VCFO Services
Growing
Developing
ME-1
ME-2
EU-1
EU-2
SE
Others
Select Your Location
Nidhi companies are established for initiating and promoting the practice of savings amongst its members. Therefore, they do not deal with the funds of any person other than their members. Traditionally, ‘Nidhi’ means ‘to treasure’. In the recent context, ‘Nidhi’ means to promote the mutual benefit of members. It is for this reason, Nidhi companies are also known by the name of Mutual Funds, Mutual Benefit Company, etc.
Moreover, only individuals can become members of a Nidhi Company, who contribute their savings, which is the principal source of funds of a Nidhi Company. Such a company also provides loans to its members at a reasonable rate of interest for the construction of a house, repairs of a house, etc. Here we will take a look at Nidhi Company Registration.
Table of Contents
As its operations are quite similar to that of NBFCs, Nidhi companies also come under the purview of the Reserve Bank of India (RBI). However, since its dealings in deposits and loans are only limited to its members, they are exempted from the core regulatory compliances of an RBI.
As per the Companies Act [1], only a public limited company having a minimum of 7 members and 3 directors can be incorporated as a Nidhi Company. The objectives of a Nidhi Company shall be well reflected in its Memorandum of Association as its object clause.
Now, when we are clear about the concept of a Nidhi Company, let’s take a look at the procedure to be followed for the Registration of Nidhi Companies:
Once it is registered as a public company, then, within one year of the incorporation of a Nidhi Company, the following conditions must be satisfied:
Due to its easy formation and limited rules for Nidhi Company offers the following advantages:
No Nidhi Company shall carry out any of the following activities:
On the whole, it can be said that the Nidhi Companies are an alternative to the banking system in the country, which caters to the financial needs and provides financial services to only its members. Its coverage is narrower than that of banks and has the functionality of a public limited company. Hope this article provides enough information on how to register a Nidhi Company in India?
Read our article: Rules Regarding Nidhi Company
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Are you human?: 3 + 8 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Public deposit is one of the best ways to raise fund in Nidhi Company however, timely repayment to depositors is ma...
13 Sep, 2017
Section 406 of the Companies Act 2013 governs Nidhi Companies & RBI Act govern NBFC. In this article, we will c...
25 Jul, 2017
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!