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    Nidhi Company: Overview

    A Nidhi Company is a type of non-banking financial company (NBFC) that primarily aims to promote the mutual benefit of its members. It facilitates saving habits, takes deposits, and lends money exclusively to its members. These companies operate on the principle of mutuality, where only individual members (not corporate entities) can become part of the company.

    Key Features of a Nidhi Company

    1. Public Company: A Nidhi company must be incorporated as a public limited company.
    2. No Preference Shares: It cannot issue preference shares to its members.
    3. Paid-Up Capital: The company must have a paid-up equity share capital of at least ₹10 lakhs.
    4. Name Suffix: The company must end its name with “Nidhi Ltd.”
    5. Limited Membership: Nidhi companies are limited to accepting deposits from and lending money to their members only.
    6. Regulation: Although Nidhi companies function independently, they must comply with regulations set by the Central Government.

    Benefits of a Nidhi Company

    1. Lower Interest Rates: Nidhi companies offer loans at lower interest rates compared to traditional banks.
    2. Foster Saving Culture: They help in promoting savings among members and offer financial support when required.
    3. Limited Liability: Shareholders’ liabilities are limited to their shares in the company.
    4. Easy Access to Funds: Members can quickly access loans at favorable terms.
    5. Independence: The company operates independently, adhering to specific rules without the complexities of larger banking systems.

    Documents Required for Nidhi Company Registration

    1. Self-attested ID proof: Valid Passport, Voter ID, Aadhar card, or Driving License for all members, subscribers, and directors.
    2. Self-attested Address proof: Recent utility bills or bank statements (not older than 2 months).
    3. Self-attested PAN Card: For all members, subscribers, and directors.
    4. Passport-sized photos: 2 photos for each member/subscriber and director.
    5. Registered Office Documents:
      • If on lease: Lease agreement and NOC from the landlord.
      • If owned: Property papers and NOC from the property owner.
    6. Additional Information:
      • The proposed share capital, occupation, and educational qualification of members and directors.
      • Business objectives and details of the company.

    Knowledge Base

    A Nidhi company is a type of financial company that aims to take deposits and lend money to its members for their mutual benefit. It operates based on the principle of mutuality, where only members can deposit or borrow.

    • Minimum 7 members/subscribers.
    • Minimum 3 directors.
    • Paid-up share capital of at least ₹10 lakhs.
    • Net owned funds of at least ₹20 lakhs after one year of operations.

    Nidhi companies provide their members with the opportunity to save and borrow at lower interest rates, fostering a sense of community and mutual financial growth.

    No, Nidhi companies cannot issue preference shares to their members under any condition.

    The registration process involves:

    • Reservation of name via SPICe+ form.
    • Filing of SPICe+ (Part A and B), Memorandum of Association (MOA), and Articles of Association (AOA).
    • Uploading the forms to the Ministry of Corporate Affairs and obtaining approval.

    The minimum paid-up capital required for a Nidhi company is ₹10 lakhs.

    Yes, foreign nationals can be members of a Nidhi company, provided they meet the necessary legal requirements, including having a valid business visa.

    Yes, a Nidhi company must have at least 200 members within one year of its operations.

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