What is a Nidhi Company?
It is a company classified as an NBFC (a Non-banking financing company) and registered under Section 406 of Companies Act, 2013. The main business of such a company is to facilitate lending money between the core members of the company. This way members (or shareholders) are encouraged to save money and invest them within the company. These deposits are then used by the company for its members (or shareholders), to provide loans or advances, and to acquire government-issued stocks/bonds/debentures/securities. It is regulated by the Ministry of Corporate Affairs, while the RBI monitors all its financial dealings.
Benefits of a Nidhi Company
- Cheaper To Borrow:As a member, one can borrow money at a minimum rate, relative to the rate at which banks lend money. This can be a major advantage in times of need, as different individuals in the mutual benefit society are likely to need funds at different points in time.
- Encourages Savings:It encourages all its members to save money and encourages a thrifty lifestyle. A Nidhi Company, after all, is a mutual benefit society wherein members can lend or borrow money and accept financial aid amongst them.
- Fewer Complications:Borrowing and lending to known persons, where the procedure is fixed, is much less complicated than dealing with banks or in an informal setting. A Nidhi Company enables its members to unlock the potential of their money and gain from lower interest rates when they require money themselves.
Bigvakil’s Procedure for Nidhi Company Registration
Contrary to what you might think, registering a Nidhi Company is a simple 3-Step process and can be done completely online. We’ve laid it out below.
- Name Reservation – We help you reserve your name with MCA.
- DSC and DINs – We help you get 1 DSC and 3 DINs.
- Documents and approval – We help you at every stage of the documentation process and in getting in-principle approval from the RBI.
Documents Required for Nidhi Company Registration
To Be Submitted By All Directors
- Self-attested copy of PAN Card
- Self-attested copy of Driver’s License/ Voter ID/ Aadhaar Card/Passport
- Self-attested copy of Bank Statement/ Telephone Bill/Mobile Bill/ Electricity Bill
- Passport-size Photograph
- Specimen Signature Certificate
