A Nidhi Company is one of the types of Non-Banking Financial Company (NBFC) recognized under Se...
A complete and comprehensive guide to the Nidhi Company Registration Requirements in India! What is the meaning of Nidhi Company Registration?
In Hindi language, Nidhi means “treasure” and is mainly associated with the habit of thrift and savings among its members.
A Nidhi company is a company that comes under the section 406 of Companies Act, 2013 and falls under the category of a non-banking financial institution. It is regulated by the MCA (Ministry of Corporate Affairs).
Imbibing the good habit of thrift as well as savings among its members.
By receiving and lending deposits to and from its members for their mutual benefit, which complies with the rules of Chapter XXVI of Companies Rules, 2014.
The funds that are received from the members of a Nidhi company can be utilized only for the mutual benefit of the members themselves. In fact, the principal source of revenue of the Nidhi Fund is the contribution that is made by the members of a Nidhi company. In addition to this, the Nidhi Company gives loans to its members at a low cost comparatively i.e. the loans are provided at a very reasonable cost to the members of the company.
As most of the money comes from the member, hence deposits elevated by Nidhi Company are not so much as compared to the organized banking sector
Since Nidhi’s come under one class of NBFCs, the RBI has the necessary power to issue directions to them in matters of their deposit acceptance activities.
Nidhi’s only cope up with their shareholder members only, reserve bank of India has accepted such notified firms from the main provisions of the RBI Act. As on date (February 2013), RBI does not have any specified regulatory framework for Nidhi Company.
The rules made by the center in 2014 for the Nidhi Company was for the purpose of carrying out the objectives of Nidhi Company. These rules must apply:
Digital Signature Certificate- It is mandatory for all the proposed directors of the company to have a digital signature which is further used for ROC compliance forms, file the registration as well as the tax returns.
Director Identification Number- After the approval of digital signature, it is mandatory to have a DIN or a director identification number (a unique number assigned to each director), which is sent by the registrar of the companies through an email that now you are eligible to be the director of the Nidhi company.