Nidhi Company means a Company which has been incorporated as Nidhi with the object of saving public fund and receiving deposits from and lending to its members for their mutual benefits. The principal source of funds is the contribution from members. Nidhi is established mainly for creating the habit of savings amongst its members.
Nidhi in India context means “TREASURE”. Nidhi Company is a special class of company with certain restrictions related to its object, membership, share capital, net owned fund and deposit.
Accordance to the Companies Act, the Company is legal entity. Company can own property and take debt from its member for run the business. The members of a Nidhi company have no liability to the creditors of a Nidhi company.
Perpetual succession means continued existence. A Nidhi company has continued existence until any legally cause will be accrue. In simple, means legally dissolved. Nidhi Company have not affected by the death of its members or directors.
Nidhi Company can acts as a mini bank. Save members savings and does work for its Members. In Nidhi Company members can deposits their funds in Saving Account, Fixed Deposit Account and Recurring Deposit Account.
The Board of Management of a Nidhi company can be easily changed by filing simple forms with the Registrar of Companies. The Board of Management of a Nidhi company controls the activities of the Nidhi Company.
The liability of the shareholder is only up to the amount that they invested in the company. Limited liability protects the personal wealth of a Nidhi Company's Member, and does not put personal assets at risk.
There are many allowances and tax deductible costs that can be offset against the profits of a company and the tax would be paid after deducting many costs incurred by director. In addition to that the current level of Corporation Tax is lower than income tax rates.
The Company enjoys better route for borrowing of funds through the members. Nidhi Company can take deposits from Members by way of Saving Deposit Account, Fixed Deposit Account, Recurring Deposit Account and can borrow from Company Directors and its Relatives as per the list provided in the Companies Act and Banks and Financial Institutions.
|1 At the end of Financial Year Annual Filling must be file to the Registrar of Companies. Half Yearly Returns has to be filed at ROC.||1 Nidhi Company shall not issue preference shares.|
|2To hold the Annual General Meeting once in a financial year.||2A body corporate and trust can not be member of nidhi company.|
|3 Net Worth of the company should not be less then Rs.10,00,000||3 No, current account with the members can be open by the nidhi company.|
|4 After the incorporation nidhi company shall increase minimum number of members to 200 within one year.||4 Nidhi company cannot pledge any of assets lodged by its members as security.|
|5 Nidhi company can give loan against the securities of :
||5 Nidhi company can not carry on the following business:
|6Nidhi Company may open up to 3 branches only within the one district.||6 Nidhi Company can open branch only if it earns net profit during the 3 preceding financial year.|
Nidhi Company is a company which is a public company and which is incorporated with main object of saving funds. In legal sense, they are created mainly for cultivating the habit of thrift and savings amongst its members.
The following documents are needed:
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