Introduction:-
Nidhi companies play a vital role in the financial sector by fostering a culture of thrift and savings among their members. If you're considering establishing a Nidhi company, it's crucial to understand the minimum requirements for registration. We will delve into What are the minimum requirements for Nidhi Company.
What is a Nidhi Company?:-
A Nidhi company, regulated under the Companies Act, 2013, is a non-banking finance corporation (NBFC) that primarily deals with borrowing and lending money among its members. Unlike traditional banking institutions, Nidhi companies can only transact with their shareholders, making them a unique entity in the financial sector.
Minimum Requirements for Nidhi Company Registration:-
1. Minimum Number of Members
To kickstart the process of Nidhi company registration, you must ensure that there are a minimum of 200 members on board. These members must be individuals and not entities or organizations.
2. Minimum Capital Requirement
A Nidhi company must have an initial capital of at least Rs. 5 lakhs. This capital is essential to initiate the operations of the company and ensure its financial stability.
3. Directorship
A Nidhi company must have at least three directors. These directors play a pivotal role in governing the company and ensuring compliance with regulatory requirements.
4. Minimum Subscriber Requirement
Every member must subscribe to a minimum of 10 equity shares or higher as per the company's memorandum of association.
5. Object of Nidhi Company
The primary objective of a Nidhi company is to cultivate the habit of thrift and savings amongst its members. It achieves this by lending and borrowing money exclusively among its members.
6. Restrictions on Business Activities
Nidhi companies are restricted from engaging in activities other than those specified in their memorandum of association. They cannot involve themselves in activities like chit fund, hire purchase finance, leasing finance, insurance business, or any form of investment except for government securities.
7. Name of the Company
The name of the Nidhi company should include the words 'Nidhi Limited' at the end. This helps in distinguishing it from other types of companies.
8. Regional Presence
A Nidhi company must have a registered office within its district of operation. This office will serve as the center of its operations and administration.
Conclusion:-
Establishing a Nidhi company can be a promising venture, provided you meet the minimum requirements for registration. These requirements are in place to ensure the stability and credibility of the financial institution. If you're looking to embark on this journey, make sure to adhere to these essentials.