Nidhi Finance Company may be the best option for you if you want to launch a finance company that caters to small investors and offers savings and lending services. Nidhi limited firms are a form of non-banking financial company (NBFC) that operates on the mutual benefit premise. They are controlled by the Nidhi Regulations, 2014, and are regulated by the Ministry of Corporate Affairs.
What precisely is a Nidhi Financial Company?
A Nidhi company is a form of NBFC that primarily deals with lending and borrowing among its members. It is a corporation founded for the benefit of its members, who contribute money to the corporation in exchange for dividends and other benefits. Nidhi company function on the mutual benefit concept, with members serving as both owners and beneficiaries.
A Nidhi company’s major goal is to encourage thrift and savings among its members and to lend money to them at a reasonable interest rate. Nidhi firms are not permitted to provide any other form of financial services, such as insurance or securities trading.
How to Form a Nidhi Financing Company?
To incorporate a Nidhi corporation, complete the processes outlined below:-
Register a Company: Under the Companies Act of 2013, the first step is to register a company with the Registrar of Companies (ROC). You must select a distinct name for your firm and get a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for each prospective director.
Memorandum of Association (MoA) and Articles of Association (AoA): The next stage is to create the company’s MoA and AoA, which explain the company’s aims and policies.
Minimum capital requirement: Rs. 5 lakhs in paid-up equity share capital is a must for a Nidhi company firm.
Board of Directors: A Nidhi corporation must have at least three directors, who must all be persons.
Applying for NBFC registration: Once the firm is registered, you must apply to the Reserve Bank of India for NBFC registration (RBI). The appropriate documents of Nidhi company formation, such as the MoA, AoA, and other financial statements, must be submitted to the RBI for approval.
Nidhi business registration: After receiving NBFC registration, you may apply to the Ministry of Corporate Affairs for Nidhi limited company registration. Together with the application form, you must submit the relevant papers, such as the certificate of incorporation, MOA, and AOA.
Establishing a Nidhi financing firm in India may be a successful business opportunity if all of the appropriate rules and regulations are followed. Nidhi firms must adhere to tight restrictions, but they provide various benefits, including low-cost operations, a loyal client base, and a high return on investment. If you want a low cost of Nidhi company registration, you should speak with a competent adviser and follow the essential measures to ensure the successful incorporation of Nidhi finance company.
