A Nidhi company is a type of financial company that is specific to India, and it is different from other types of companies in several ways:
What is the Purpose of Nidhi Company?
The primary purpose of a Nidhi company is to provide loans to its members and encourage savings among its members. Unlike other financial institutions, a Nidhi company operates for the mutual benefit of its members, and any surplus earned is distributed among members in the form of dividends.
A Nidhi company is owned and managed by its members, who are also its borrowers and depositors. Other types of companies, such as private limited companies, may have shareholders who are not necessarily involved in the day-to-day operations of the company.
Regulation for Doing Nidhi Business:
Nidhi companies are regulated by the Ministry of Corporate Affairs in India and are required to comply with specific regulations and guidelines. Other types of companies, such as private limited companies, are subject to different regulations and may have different compliance requirements.
Capital Requirements in Nidhi companies are required to maintain a minimum net-owned capital of INR 5 lakhs, which is lower compared to other types of companies. You Can make Nidhi company Registration Online in Few Hours With our Expert Team.
What are the Business Activities of Nidhi companies?
There are limited to specific business activities, such as accepting deposits from members and providing loans to members. Other types of companies may be able to engage in a wider range of business activities.
In conclusion, a Nidhi company is a specific type of financial company that operates for the mutual benefit of its members and is subject to specific regulations in India.
It is different from other types of companies in terms of purpose, ownership, regulation, capital requirements, and business activities.
What are the Steps to form Nidhi Company?
The process of making a Nidhi company involves the following steps:
- Obtain Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs) for the proposed directors of the company.
- Apply for the availability of the proposed name of the company with the Ministry of Corporate Affairs (MCA).
- Prepare and file the memorandum of association (MOA) and articles of association (AOA) with the Registrar of Companies (ROC).
- Obtain the certificate of incorporation from the ROC after the necessary filings and filings are processed.
- Obtain a permanent account number (PAN) and a Tax Deduction and Collection Account Number (TAN) for the company.
- Open a current account in the name of the company.
- Appoint an auditor for the company and obtain the Certificate of Commencement of Business from the ROC.
- Register the company for goods and services tax (GST) if required.
- Comply with the ongoing regulatory requirements under the Companies Act, 2013, such as holding annual general meetings, maintaining accurate financial records, and filing annual returns with the ROC.
It’s important to note that these steps may vary slightly based on the jurisdiction in which the company is being formed and the specific requirements of that jurisdiction. It is advisable to seek the help of a professional or an expert in the field to ensure that the process is completed correctly and efficiently.