The main objective behind building up a Nidhi Company is to urge its members to save so that they can easily meet their monetary requisites emerging from time to time. By being thrifty they become independent and would meet any future expense. And the advantage of getting a company enlisted as Nidhi doesn’t end here.

There are many favourable benefits of forming a Nidhi Company. Some are listed below:

• ✔ Liability is Limited: The liability of Directors and investors of a Nidhi Company is limited. The individual resources of any of the Directors or members are not in danger of being seized by banks, creditors, and government.
• ✔ Fewer Regulations: Nidhi organizations are administered under the Nidhi Rules, 2014. The Central Government is the directing power, and it only controls it’s exercising and working. Not many Rules are enforced by the RBI on a Nidhi company.
• ✔ Better Credibility: Nidhi companies offer better credibility instead of some other member-based associations like “Trusts, Cooperative Societies, or NGOs.”
• ✔ Better Option for Savings: The main purpose of a Nidhi Company’s incorporation is to encourage the habit of saving among the members (shareholders) of the Company. This is how it achieves the other goal of being mutually beneficial. The Nidhi Companies are allowed to lend and borrow money from it’s members (shareholders) only.
• ✔ Easy Access of Public Funds: The loans from the Nidhi Company comes at a less expensive rate than advances from banks and other NBFCs.
• ✔ Micro Banking: Nidhi companies give banking services to the remote and rural public of India, who are still located in far-off lands.
• ✔ Better Credit Co-operative Society: A Nidhi Company is a nearby substitute for a credit co-employable society. Furthermore, it is increasingly favored by the small financers. When a Nidhi organization has been enlisted, the members can profit from a considerable number of advantages of credit co-operative society.
• ✔ Simple Processing: Borrowing and lending to known people is substantially less confusing than managing banks, where the method is generic and fixed.
• ✔ Easy Registration Process: The procedure to enroll a Nidhi Company with LegalRaasta is very easy and transparent. You don’t have to take any permits from RBI. You simply need to incorporate your organization as an open constrained, with the MCA.
• ✔ Single Regulatory Body: After the Amendment in Companies act 2013, Nidhi Companies are supervised by the Nidhi Company Rules, 2014.
• ✔ Low Capital Requirement: Ministry of Corporate Affairs (MCA) orders that the base capital requisite is Rs.5 lakhs for a Nidhi company. And, within 1-year, the capital has to be raised to be at least Rs.10 lakhs. The “Fees, DIN, DSC & Other Expenses” are approximately Rs.25-30,000. These include Government fees that, differ from State to State.
• ✔ Fulfilling the needs of Lower & Middle-income groups: Nidhi Companies assume a significant job in addressing the needs of lower and middle-income groups by giving them money related assistance without complex formalities and documentation.
• ✔ Easier Eligible: People getting minimum wages and belonging to lower strata are usually unable to take loans from traditional banks because of their high eligibility criteria. For them, a Nidhi Company is a good option to obtain finance because of the fewer conditions.
• ✔ No External Involvement: Nidhi Companies take assets from their members and further gives credit to it’s members. In this way, no outer variables are influencing the work of these organizations. The financial members themselves direct the tasks of the organization.
• ✔ Separate Entity: A Nidhi Company is a separate legal entity that can acquire assets and incur debts in it’s own name.

Given below are the essential conditions that must be met for registering or operating as a Nidhi Company.