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What is Nidhi Company Registration?
Nidhi is a company formed to cultivate habit of saving and thrift and mutual benefit of members by lending and borrowing between members of the company. A Nidhi company is a non-banking financial company(NBFC) which is regulated by Reserve bank of India from time to time. However, RBI has excluded the Nidhi companies from the core provisions of RBI act.
Minimum number of members required to make a Nidhi company in India is three.”Nidhi Limited” words are mentioned in the name of the company. Management of a Nidhi company doesn’t have external involvement so it becomes easier to manage a Nidhi Company. Also, investments in a Nidhi Company are secure. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Reserve Bank of India is empowered to issue directions to Nidhi Companies in matters relating to their deposit acceptance activities. Nidhi Company registration is simple as compared to other types of finance companies like NBFC which require RBI license to start.
Process of Nidhi Company Registration?
Get DSC(Digital Signature Certificate) and DIN(Director Identification Number (DIR 3 form) for the directors of the company which is issued by the MCA(Ministry of Corporate Affairs) by providing information through simple form on LegalDocs.
Approval of Name of the company(Form no. INC 1): Prior to approval of the name, a company name must be reserved with the MCA so that no one else can use it and it doesn’t match with existing companies.LegalDocs will handle this process and get your company name approved from the MCA.
Registration i.e. incorporation of company through form number INC 7,8,10,9,22, DIR 12,2 with documents with the registrar of companies is done after above mentioned processes which will be handled by our team.
Documents Required for Nidhi Company Registration
|Copy of Director’s PAN Card||Passport size photograph of Directors||Copy of Aadhaar Card/ Voter identity card of directors|
|Copy of Rent agreement(If rented property)||Electricity/ Water bill (Business Place)||Copy of Property papers (If owned property)|
Advantages of Nidhi Company Registration
- Separate Legal Entity:
A Nidhi Company is considered as a separate legal entity and can own a property and incur debts
- Easy Management:
Registrar of companies governs the change of board members and thus can be done easily.
- Ongoing concern:
As long as the company is in existence, no member can claim a right on the property owned by the company.
- Uninterrupted Existence:
Changes in membership or death of members does not affect the existence of the company.
- Better Credibility:
Central government registers and monitors the Nidhi companies.
- Lower rate of Interest:
Rate of interest of borrowing for members is less as compared to the market rate.
- Limited Liability:
Any member is liable to only the amount he has invested in the company.Easy Ownership Transfer Tax Benefit.