Features of Nidhi Company
Mutual Benefit
The primary objective of a Nidhi Company is to promote the habit of thrift and savings
among its members, and to provide them with a platform for mutual benefit by lending
and borrowing money among themselves.
Limited Deposit Acceptance
A Nidhi Company can accept deposits only from its members, and the maximum amount of
deposits that can be accepted cannot exceed 20 times the net owned funds of the
company.
Strict Regulation
Nidhi Companies are regulated by the Ministry of Corporate Affairs and must comply with
various regulations and guidelines issued by the Reserve Bank of India (RBI).
No External Borrowings
A Nidhi Company cannot borrow from any external sources
Secured Loan to its members
A Nidhi company can only grant secured loan to its members. Securities against which
loans can be granted are gold, property, and deposits.
Limits the personal liability.
A Nidhi company provides limited liability protection to its owners and shareholders.
This means that if the company fails, the owners are not personally liable for any
debts or liabilities incurred. This provides a great deal of financial security to the
owners, as they are not at risk of losing their personal assets in the event of a
business failure.
Separate legal entity
A Nidhi company is a separate legal entity. This means that the company is recognized
by the law as an independent legal entity and is responsible for its own liabilities
and obligations. This provides the owners and shareholders with a great deal of freedom
as they are not personally responsible for any of the company’s actions.
Limited Deposit Acceptance
A Nidhi Company can accept deposits only from its members, and the maximum amount of
deposits that can be accepted cannot exceed 20 times the net owned funds of the
company.
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Sign and share the documents
Filing of registration application with ROC
