Most of the investment companies in India cater to a large amount of money, whereas banks provide very little scope for growth in savings. Nidhi Company provides the most effective and easy way to save your money with a wide scope of monetary growth. It is a type of public limited company and is governed by the Companies Act, 2013. Get to know the benefits, process, requirements and fees of Nidhi company registration.

Nidhi companies play a significant role in promoting financial inclusion and providing access to credit in rural and semi-urban areas of India, especially for individuals who may not have access to formal banking services. However, they must operate within the regulatory framework set by the government to ensure the protection of members' interests and financial stability.

Table of content

1. Inculcates the habit of savings:

The sole objective of Nidhi company is to promote the culture of savings among its members.

2. Few RBI guidelines:

Nidhi company falls under NBFC category, but it does not require approval of Reserve Bank of India.

3. Limited Liability:

As per the Companies Act, 2013, directors and shareholders have limited liability. If the company suffers any losses or issues, personal assets of the directors and shareholders are secure.

4. Separate Legal Entity:

Nidhi Company is a separate legal entity which means it can acquire assets and incur debts on its own name.

5. Easy Formation:

The process of Nidhi company formation is very simple and easy. There are very few requirements compared to other NBFCs.

6. Ease of Management:

Even though Nidhi Company is an NBFC, it is very easy to manage and make changes in the organization.

1. Passport size photographs of members
2. Copy of Aadhar Card or Voter ID
3. Copy of PAN Card of the members
4. Email address and phone number
5. Proof of registered place of business
6. Bank statement (not older than two months)
7. No Objection Certificate from the owner of the property

Post incorporation of Nidhi company, you’ll receive the following documents:

1. Certificate of Incorporation
2. Permanent Account Number (PAN) of the company
3. Tax Deduction or Collection Account Number (TAN) of the company
4. Articles of Association (AoA)
5. Memorandum of Association (MoA)s
6. Director Identification Number (DIN)
7. Digital Signature Certificate (DSC)
8. EPF and ESIC registration documents
9. Company Master data

As Nidhi companies are involved in a non-banking financial transaction, they are prohibited from performing the following activities:

1. Advertise themselves for deposits
2. Chit funds
3. Lotteries
4. insurance
5. Leasing Finance
6. Hire-Purchase finances
7. Sell the assets of its members and keep it as a security for providing loans
8. Sell the assets of its members and keep it as a security for providing loans
9. Accepting deposits or lending funds to the outsiders