An Overview of Nidhi Company

A Nidhi company is a category of Non-Banking Financial Company (NBFC). A minimum of seven members are required to start a Nidhi company, and out of these, three members have to be the Company Directors. This type of business entity works on the rationale of mutual benefit and is formed for its members to borrow and lend money. The members of the Nidhi Company contribute the funds that are available for borrowing and lending. The sole objective of a Nidhi company is to encourage the members and inculcate the habit of savings amongst them.

A Nidhi Company is prohibited from doing any business dealing with leasing finance, insurance, chit funds, securities business or hire-purchase. The funds available is exclusively lent and borrowed amongst the members only. Furthermore, they are also forbidden to advertise asking for deposits for the company, i.e., everything is given by the members and for the members. By working with us, our Team at Taxrepair ensures that all the legal requirement for registering Nidhi Company is fulfilled seamlessly.

Document Required for Registering a Nidhi Company in India

The following documents are needed while registering a Nidhi Company.

• PAN Card scanned copy (Self-Attested & Mandatory)
• Self-Attested scanned copy (for ID Proof):
• Aadhar card
• Passport
• Voters ID
• Driving license
• Self-Attested scanned copy of(Not older than two months, preferably the latest one) (used for Address Proof):
• Latest bank statement
• mobile or telephone bill
• gas or electricity bill
• Four passport size photographs

For Registered Office

• Scanned copy (Not older than two months, preferably the latest one) (used for Address Proof):
• Latest bank statement
• Mobile or telephone bill
• Gas or electricity bill
• The scanned copy of the rental agreement if the registered office is on leased or rented property
• The latest scanned copy of NOC from the property owner if the registered office is leased or rented.

Benefits of Registering a Nidhi Company

Borrowing is Cheaper.

The members of the Nidhi Company have the advantage of borrowing funds at a cheaper rate, i.e., the rate of interest the borrower has to pay to a Nidhi company is relatively lower than the rate of interest charged by the banks.

It is comparatively less complicated.

In a Nidhi company, the lending and borrowing are only with the members, i.e., known persons. Therefore, all the processes and procedures that need to be followed are fixed andvless complicated. Whereas while dealing with banks or other financial institutions, lending and borrowing procedures are subject to a lengthy process involving various rules and regulations.

Limited Regulations

Although Nidhi company is a financial company coming under the NBFC category, it doesn’t require any sanction from the Reserve Bank of India (RBI) to operate. The Nidhi company is also exempted from all the rules and regulations to be followed by any NBFC.

Perpetual Succession

The operations of Nidhi Company will carry on uninterrupted amid any death, insanity or retirement of any of the members of the entity as this type of organisational structure practices perpetual succession.

Easier to get Loan

The members of the Nidhi company can borrow money at a relatively lower rate of interest than the market rate. Moreover, being a recognised infrastructure by the central government, the bank trusts the Nidhi company member, thereby acquiring loans easily.

Timelines for Registering Nidhi Company

We at Taxrepair, are known to provide end-to-end solutions for all the requirements related to the registration of the Nidhi company. As a result, the registration of the Nidhi Company can get completed in approximately 15-20 days, subject to the timeline followed by the concerned government official in terms of giving the required approval and revert. Our team ensures a seamless interaction with the concerned government official to get the registration done.

Contact Taxrepair, and allow our experienced team in giving you the best legal services for your business.