Nidhi Company is Company which is established mainly with the purpose of promoting the habit of savings among the members of the Company. Such companies receive deposits from its other members and create a common pool. Then money out of such pool is lent to its members on need basis at nominal interest rates. This activity of acceptance and lending of money is governed by the Rules made in this behalf. A Nidhi Company should be in the nature of the Public Company.
Checking the name availability of the Company and applying to ROC for obtaining the approval of the name.
Applying for the DIN and digital signatures of the Directors of the Company.
Drafting of the Memorandum and the Articles of association of the Company
Filing/ E-filing of the all the relevant documents with the ROC and obtaining the Certificate of Incorporation of Company
Opening the bank account and applying for PAN/ TAN/ other registrations.
Unlike banks and NBFC’s, Nidhi Company is incorporated for the mutual benefit of its members. It is not entitled to accept deposits from or carry out any other finance activity apart from its members.
Nidhi Companies are registered under the Companies Act and is governed by its specific as well as general provisions. Apart from the Act, there are Nidhi Company Rules which are specific and stringent in nature.
No. Since Nidhi Company operates with its members, they are specifically exempted by RBI to register itself as NBFC’s.
Yes the deposits are secure since Ministry of Corporate Affairs along with Government of India has made stringent rules with regard to regulating the Nidhi Companies.
Only members/ shareholders can invest in or can accept loans from Nidhi companies.