A Nidhi company is one that is established with the objective of increasing thrift and savings among its members. The borrowing and lending of money are restricted to its members only for their mutual benefit. It has been recognized under section 406 of Companies Act 2013 and (Nidhi Companies) Rules, 2014. The main idea of Nidhi Companies is the “Principle of Mutuality” because of which they are also called Mutual Benefits Company.
Pre-Requisites of Nidhi Company Registration
· Minimum number of Directors required: 3
· Minimum number of members required: 7
· Minimum Capital requirement for incorporation of a Nidhi company: Rs 5 lakh
· The words Nidhi Limited shall be suffixed in the name of a Nidhi Company.
· The main objective of Nidhi Company should be to foster the habit of saving among its members by receiving deposits and lending money to them when in need.
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