WHAT IS A NIDHI COMPANY IN DETAIL?

Nidhi Company is a type of non-banking financial company (NBCS). It lends and borrows money to its core members (shareholders) only. And it looks into the mutual benefit of the members. As per the experts, certain listed exemptions are given to these companies in respect of annual compliances and taxations. 

The objective of incorporating a Nidhi Company Registration in Jaipur (India) is to encourage savings amongst its members only. 

Accordingly, the Nidhi Companies in India are formed, governed, and well-regulated by Section 406 of the new Indian Companies Act of 2013, the Companies (Nidhi Companies) Rules of 2014, and the Chapter XXVI of the Companies Rules, 2014.

 

And then to fulfill this very objective of cultivating the habit of saving amongst its members. Nidhi Companies are allowed to take a deposit from and lend to the members only. It is important to understand that the funds contributed to a Nidhi company come only from its members and are to be used by the shareholders of the titled 'Nidhi Company'. 

The name 'Nidhi' in Nidhi Company means 'treasure' originated from the Hindi vocabulary. 

It is a certain type of NBFC. Though not regulated by the RBI, still RBI has powers to issue directives for them related to their deposit acceptance activities. One needs to understand that Nidhi Companies generally deal with their shareholder-members only, who are relieved from the core provisions of the RBI Act and all other directions as applicable to NBCs. Therefore, Company Registration in Jaipur (India) is an ideal entity to take a deposit from and lend to a specific group of people. 


Nidhi Company Registration in Jaipur


 Overview related to Nidhi Company Registration 

 

All the related guidelines and regulations for the Nidhi Companies are also issued by the (Reserve Bank Of India) RBI. And all these are generally related to the financial activities and investments by companies including NBCs.

Section 406 of the Companies Act of 2013 and the Companies (Nidhi Companies) Rules of 2014 comprises all the provisions which are with relation to the 'incorporation and governance of the Nidhi Companies in India'. As the NBCS is engaged in the business of deposits and loans by its members only, as certain exemptions have been provided to these many companies, by the RBI. 

According to the Chartered Accountant in Jaipur, the interest charged on the loans under a Nidhi Company is quite reasonable. The purposes these are sought include manufacturing/innovation of houses or child's education and many more. The loans are provided based on security only. 

 

The deposits made under Nidhi's do not earn much interest as compared to the deposits in the organized banking sector. 

All lending and borrowing of the Nidhi Companies are done by its very members of the firm only. Hence, such companies are also referred as 'Mutual Benefit Societies' -they work for the mutual benefit and welfare of all the members. 

 

Note :-

If you are looking to start a business in financing or loans in Jaipur (India), then Nidhi Company Registration is the best option to go for. 

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