We know that Nidhi companies are the companies that primarily do lending and borrowing among its members. It is based on the principle of mutual benefit and with the objective of inculcating the habit of saving among its members. Nidhi companies are more prevalent in southern parts of India. Nidhi companies in India use Nidhi software for managing operations at Nidhi companies, if you are looking for Best Nidhi Software in India then you can approach SKILL TEASER technologies private limited as they provide one of the best Nidhi software in India.
A Nidhi company is a kind of non-banking financial company (NBFC). These are formed to borrow and lend money to its members only and they strictly deal with its members only. They do not need
Need license from RBI although they need to register as public company and their names should?
End with Nidhi limited.
ACTIVITIES THAT ARE NOT ALLOWED AS NIDHI COMPANY
They cannot deal with chit funds.
They cannot deal with hire -purchase finance.
They cannot deal with insurance business.
They cannot deal with securities business.
They are not allowed to accept deposits except from their members and same goes for lending as well they cannot lend funds except their members only.
BENEFITS OF REGISTERING AS NIDHI COMPANY
LEGAL EXISTENCE: Registration of a company as Nidhi Company makes it a separate entity. Legal existence as a registered mutual benefit company is enjoyed by the Nidhi Company.
LIMITED LIABILITY: Members are only liable as per their share in the company and their liabilities are limited and they are very much in accordance with the amount invested.
AVAILABILITY OF FUNDS: Once Nidhi Company is registered members can get themselves lower interest rates from the very fund in which they have contributed as well.
MINIMUM REQUIREMENTS FOR NIDHI REGISTRATION
In order to get registered as Nidhi Company there are certain requirements that need to be filled which are as follows:
Company needs to be incorporated as a public limited company under the companies act.
There has to be minimum of seven shareholders.
Minimum three directors are required.
Earlier minimum capital required was five lakh which has now been increased to ten lakh in the latest amendments in the Nidhi rules.
Minimum of 200 members are required.
Net owned fund of at least 20 lakh is required.
Name of the company should end with “Nidhi limited”.
As far as objective is concerned their objective should be borrowing and lending to members only.
Company should have Term deposits of 10% or more of the outstanding deposits.
NET owned funds to deposits ratio should be 1:20 or less.
Director identification number of all directors has to be provided.