Nidhi Company is a company which deals in the circulation of money among its shareholders and members. The word Nidhi means treasure. The fund is collected from the contribution of the members and shareholders. The money so collected is used for mutual benefit. When a shareholder or member of the company requires a loan, the mutual benefit is used to fund him. It inculcates among its members the habit to save. Mutual funds, benefit funds, permanent fund are also names for Nidhi Company.
Features of a Nidhi Company
- Have ‘Nidhi Limited’ in its name
- Minimum 200 members
- Minimum 3 directors
- Net owned fund should be 1000000 INR
- No issuance of preference shares
- Investment for minor possible if guardian is member of Nidhi Company.
Advantages of a Nidhi Company
- Quick loans available for everyone
- Minimum formalities for taking loan
- Loan and investment in the same platform for small wage earners
- No brokerage on deposit and market activity
Documents required Nidhi Company
- Identity proof
- Address proof
- Proof of place of business
Procedure for incorporation Nidhi Company
- Obtain DIN, DSC
- Application for name approval in form INC-1
- Apply for incorporation by filing INC-7, INC-22 and DIR-12
- Submit required documents
Time for Nidhi Company
Time taken for incorporation is 20-30 working days.
Cost of Nidhi Company
Cost for incorporation ranges between INR 60000-80000 Although prices differ from vendor to vendor.