What is Nidhi Mutual Benefits Company?

What is a Nidhi Mutual Benefits Company?

A Nidhi mutual benefits company or a Nidhi company is an establishment that offers financial services but only to the members of the company. Nidhi Company Registration is a crucial aspect in the establishment. In this article, all the crucial aspects with regards to establishment of a Nidhi Company will be described to get a better understanding on the concept.

What are the features of Nidhi Company?

Nidhi company registration is the one of the most important decisions that a business owner makes. Thus, before applying for the registration, it is important to understand various elements or characteristics of Nidhi Company:

• The major feature of a Nidhi company is that it boosts and promotes small savings amongst the members of the company.
• Nidhi companies cannot offer high interest rates than the prescribed rate.
• There is an easy access to public funds
• It has the feature of a separate legal entity

What are the advantages of Nidhi Company?

Nidhi Company is considered by many individuals because of several benefits that it serves. The major advantages of a Nidhi company are as follows:

• It promotes small savings
• It charges a moderate amount of interest rate
• The loan processing duration is lesser than the duration it takes for a bank to process a loan.
• There is no involvement in the management of the company
• There is an easy access to public funds
• the members of the company enjoy limited liability

What is the registration process of Nidhi Company Registration?

In this section, the steps in the process for registration of a Nidhi Company will be mentioned.

• KYC of the Directors and Shareholders: For the establishment and incorporation of Nidhi Company, a minimum of 7 Members and 3 Directors are required. The directors and members can be the same individual in a Nidhi company.
• Obtain Digital Signature Certificate (DSC): Digital signature (DSC) is a mandatory requirement. DSC must be obtained by the directors as it helps in signing various forms digitally.
• Filing of SPICe+ form: This form is an important form that is filled for name reservation, DIN application and company incorporation. The company incorporation form can be filled through the SPICe plus form. The name of the Nidhi Company which will be decided by the owners must be unique.
• Final Incorporation Memorandum of Association (MOA) and Articles of Association (AOA) Drafting: Memorandum of Association and Articles of Association of the company are crucial documents that must be prepared and submitted by the individual. The MOA must mention all details of the company such as company name, objectives, aim, and proof of registered office of the Company which includes the total capital of the company, liability of the Members, Directors, Shareholders and the primary objective of the company
• PAN and TAN: The application form of PAN card and TAN must be filled along with the Nidhi Company Registration for incorporating Nidhi Company.

This article has been contributed by Mahiya Ahmed who is a content writer with SwaritAdvisors. SwaritAdvisors is an online portal that assists companies and startups with Trademark Registration, Company Registration, NBFC Registration, FSSAI Registration, Public Limited Company Registration, Copyright Registration, etc.