Compliance Corporate Filings

Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit

From incorporation within a one-year time limit, Nidhi Company must accumulate 200 members. The Net Owned Funds should be at least 10 lakh or more. Net Owned Fund is a blend of paid-up equity share capital and free reserves. Deposits must not be more than 20 times of Net Owned Funds.

Nidhi Company works with the objective of increasing savings of its members. The loans given to the members at a lower rate compared to the market rate hence it attracts the members to do more savings

Nidhi Companies are not allowed to provide or give unsecured loans to its Members and is not allowed to do Micro Finance Business and hence is only allowed to lend secured loans to its Members only.

Minimum number of shareholders or members – 7 · Minimum number of Directors -3 ·

A Nidhi company closely resembles an NBFC; however, under a Nidhi Company, deposits may be accepted from the members/shareholders of the Nidhi Company. A Nidhi Company is registered to borrow and lend to its members to promote the habit of saving money among its members and works on the principle of mutual help. Nidhi companies are very popular in southern states in India. Unlike an NBFC a Nidhi Company is not required to obtain a license from RBI; hence it is easy to incorporate.