Nidhi Company - A Nidhi Company is a company, which is a non- banking financial sector and it comes under the Companies Act, 2013. This company is formed with a motto to lend and borrow money within its members and it is very easy to form as a company. It requires at least 200 members in a year to get its Nidhi Company status. Their mode of operation is through its members only. It is the easy form of business. Nidhi Companies are regulated by the Ministry of Corporate Affairs (MCA). They are also known as Benefit Fund, Permanent Fund etc.
Requirements for NIdhi Company
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The name must contain - Nidhi Limited as suffix
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A minimum paid up capital of Rs. 5,00,000/- is required
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It can’t issue preference shares.
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At least 3 Director and 7 Members is Required. All Director need to be Member of proposed Nidhi Company.
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The objective of Nidhi Company solely would be to develop habit of thrift and saving and the services of nidhi company is only restricted to its members.
Conditions to be Fulfilled
The following conditions are to be taken care by the Nidhi Company within one year of its registration
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Nidhi Company is required to have minimum of 200 members within one year from its incorporation
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The net owned funds must be 10 lakh rupees or more.
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Unencumbered deposits (free of debt of financial liability) must be 10% or higher of the outstanding deposits
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The ratio of the deposits cannot be over 1:20 times of its net owned funds.