Important Benefits of Nidhi Company in India

 

As the name is suggesting, Nidhi company is established to cultivate the habit of saving by accepting deposits and providing loans amongst its members. There is not any stringent legal guideline from the Reserve Bank of India for Nidhi company registration in India, however, RBI has the power to issue directives for Nidhi Companies. To start a Nidhi Company in India, there are requirements of seven members and three directors. The mandatory condition for a Nidhi company is that within a year from the commencement the company must have 200 members.

Benefits of Nidhi Company:

·         Establishing a Nidhi Company in India is hassle-free and simple. It takes only 5-10 days for Nidhi company registration in India.

·      There is no requirement of massive capital to start a Nidhi Company, there is the only requirement of Rs. 5,000,00.  

·       Since Nidhi Company is a finance company, therefore it falls under the category of NBFC and does not require the approval of RBI. The Government of India enacted a Nidhi law in 2014, and all Nidhi companies comply with that legal framework, and there is the least intervention of RBI.

·    There is no outsider intervention in Nidhi Companies, these companies are managed and provide benefits only to their member.

·    Since the objective of Nidhi companies is to encourage savings, thereby for members making donations and getting loans from the company becomes very easy and hassle-free. Members of Nidhi companies get a loan at a lower rate compared to the market rate; hence it attracts the members to do more savings. Besides, investing in Nidhi Company is secure, there is a very low chance of losing money in Nidhi companies.

Nidhi Companies enjoy certain exemptions and privileges under the Companies Act,2013. Therefore, Nidhi Companies are free to make a private placement to any number of persons and it shall not be deemed to be an offer to the public.

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