July 13, 2022/
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Sec.10(13A) of the Income Tax Act, 1961 allows exemption from HRA (House Rent Allowance) received from the employer. The amount of…
Nidhi Company Registration
Nidhi Company Registration
What is Nidhi Company Registration Services ?
Nidhi Company Registration in India is a legal process through which a company can be established under the Companies Act, 2013, to function as a Nidhi Company. Nidhi Companies are non-banking financial entities that primarily aim to cultivate the habit of thrift and savings among its members. They function on the principles of mutual benefit, where members contribute funds to each other for their mutual benefit.
Nidhi Companies play a crucial role in promoting financial inclusion and providing a platform for small savers to mobilize their savings and access credit facilities within their communities.
Documents Required For Nidhi Company Registration
- Passport Sized photographs of all the directors.
- ID proof of all the designated directors and shareholders. (PAN card and Passport are valid).
- Address proof of all the directors and members (Ration Card, Aadhaar Card, Passport, Voter ID, and Utility Bill – electricity/water/mobile).
- Address Proof of the Company. Make sure that the address proof is not older than 2 months.
- Copy of the Property papers (if the property is owned).
- NOC (No-Objection-Certificate) from the owner (if the property is rented).
Benefits of Starting a Nidhi Company Registration
- The primary objective behind establishing a Nidhi Company is to encourage its members to save, enabling them to fulfill their financial needs as they arise. Through prudent saving habits, members attain financial independence and readiness for future expenses. However, the advantages of registering a company as Nidhi extend beyond this initial aim. There are numerous favorable benefits associated with forming a Nidhi Company, some of which are listed below:
- Limited Liability: Directors and investors of a Nidhi Company enjoy limited liability. Their personal assets are protected from seizure by banks, creditors, and government entities.
- Minimal Regulatory Burden: Governed by the Nidhi Rules, 2014, Nidhi organizations face minimal regulatory oversight, primarily from the Central Government, with limited directives enforced by the RBI.
- Enhanced Credibility: Nidhi companies offer better credibility compared to other member-based associations like Trusts, Cooperative Societies, or NGOs.
- Savings Encouragement: The primary aim of incorporating a Nidhi Company is to foster a culture of saving among its members (shareholders), thereby promoting mutual benefit. Nidhi Companies are permitted to lend and borrow money exclusively from their members (shareholders).
- Affordable Financing: Loans from Nidhi Companies often come at lower interest rates compared to those from banks and other NBFCs.
- Micro Banking: Nidhi companies provide banking services to the remote and rural populations of India, particularly those in distant areas.
- Alternative to Credit Co-operative Societies: Acting as a local alternative to credit co-operative societies, Nidhi Companies are increasingly favored by small financiers, offering numerous benefits to members.
- Streamlined Processes: Borrowing and lending among known individuals within Nidhi Companies are less complex compared to dealing with banks, where procedures are more standardized.
- Easy Registration: Registering a Nidhi Company with Miraculous Taxes is a straightforward and transparent process, requiring no permits from the RBI. Simply incorporate the company as a public limited entity with the MCA.
- Unified Regulatory Oversight: Following amendments to the Companies Act 2013, Nidhi Companies are supervised under the Nidhi Company Rules, 2014.
- Low Capital Requirements: The Ministry of Corporate Affairs (MCA) mandates a minimum capital requirement of Rs. 5 lakhs for a Nidhi company, to be increased to at least Rs. 10 lakhs within one year. The associated expenses, including government fees, range from approximately Rs. 25,000 to Rs. 30,000, varying by state.
- Addressing Lower & Middle-Income Group Needs: Nidhi Companies play a significant role in meeting the financial needs of lower and middle-income groups, providing financial assistance without complex formalities and documentation.
- Increased Eligibility: Individuals earning minimum wages and belonging to lower strata often face challenges obtaining loans from traditional banks due to stringent eligibility criteria. For them, a Nidhi Company offers a viable option with fewer conditions.
- Member-Centric Operations: Nidhi Companies mobilize assets from their members and extend credit exclusively to them, ensuring internal control and autonomy in operations.
- Separate Legal Entity: A Nidhi Company is a distinct legal entity capable of acquiring assets and incurring debts in its own name.
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