The objective of incorporating a Nidhi Company is to encourage savings amongst its members by cultivating the habit of saving and thrift amongst its members. Nidhi companies are allowed to take deposits from and lend to the members only.
The word “Nidhi” in Nidhi Company means “treasure” and it originates from the Hindi vocabulary.
FEATURE AND ADVANTAGES TO REGISTER A
NIDHI COMPANY
1. SEPARATE LEGAL ENTITY:
Nidhi Company is a separate legal entity that can acquire assets and incur debts in its own name.
2. NO EXTERNAL INVOLVEMENT:
Nidhi Companies take funds from their members and further provides loans to heir members only. All transactions are done within this group only. So, no external factors are affected by the working of these companies.
3. LOW CAPITAL REQUIREMENT:
There is minimum capital paid up capital requirement of Rs. 5 lakhs for registration of Nidhi Company.
4. EASY ACCESS OF PUBLIC FUNDS:
The members can take loans from the Nidhi Company at a cheaper rate than loans from banks and Financial Institutions and the process of obtaining loan are much more convenient and quicker.
