A Nidhi Company or Mutual Benefit Society/Fund or any other name by which you may know it is a public company created for the mutual benefit of its company members. This mutual benefit comes from group lending and borrowing.
Within these companies the members make deposits and these deposits are used to give secured loans to the members at a reasonable interest rate. The basic idea of a Nidhi company registration is to save its members from the exploitation of money lenders who charge high-interest rates.
By becoming members of the Nidhi company people develop habits of savings and self-reliance.
Long before the financial institutions were regulated and a proper financial framework was established, the idea of group lending and borrowing existed but not by the same name or in the same way as it exists today as Nidhi Company.
In Hindi, Nidhi refers to finance, treasure or fund. Nidhi’s used to grant secured loans against tangible assets for personal purposes like family functions, marriages, medical issues, education, property purchase, etc.
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Limited Liability: The members have limited liability which is extended up to the amount they have contributed or invested in the company. They are liable only for their share in the company. Personal Assets are beyond the reach of liability. They cannot be utilized for meeting the liability of the company.
Availability of funds: Funds contributed by members is available for the members themselves at lower interest rates.
Legal Existence: A registered Mutual Benefit Society enjoys separate legal existence. The members and the company are different. The company can buy, sell, or acquire assets in its own name, it can also incur debt in its own name, also it can sue or be sued in its own name.
Incorporate a Public Limited. Company with a minimum paid-up equity share capital of Rs. 10,00,000 with the sole object of lending and borrowing within the members.
The company must be incorporated with ‘Nidhi Ltd.’ as the last words in their name.
The company should ensure that it has a minimum of 200 members, Rs. 10,00,000 or more of Net Owned Funds, the maximum ratio of N.O.F to Deposit 1:20, debt-free term deposits of not less than 10% of the outstanding deposits, etc. The company is then required to file after the close of the first financial year NDH-1 or NDH-2 within 90 days or 30 days with ROC or RD respectively.
Get complete details about registration of Nidhi company in Jaipur & India or contact +9191160-98980 for free Nidhi Company Software consultancy.