Nidhi Company is created mainly for cultivating the habit of thrift and savings amongst its members. The companies engaged in Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.
Registration of Nidhi Company
A Nidhi company to be incorporated under Companies Act shall be a Public Company. It shall have a minimum paid up equity share capital of 5,00,000/-. No preference shares can be issued. The main focus of the company is to cultivate the habit of thrift and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefits. It shall have the words ‘Nidhi Limited’ as part of its name.
