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A Nidhi companybelongs to the category of non-banking finance firms.Recognized under Section 406 of the Companies Act, 2013, it is governed by the centralgovernment. The basic business of such a company is to facilitate lending money between the core members of the company.Examples of a Nidhi Company are permanent funds, mutual benefit funds, a mutual benefit company and benefit funds.The core idea behind creating a Nidhi Company is to receive funds (deposits) from members or lend to them, for the mutual benefit of both parties. All lending and borrowing must comply with rules laid downinChapter XXIV of Company Rules, 2014.
The Board of Management of a Nidhi company can be easily changed by filing simple forms with the Registrar of Companies. The Board of Management of a Nidhi company controls the activities of the Nidhi company.
A Nidhi company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No member can make any claim upon the property of the Nidhi company as long as it is a going concern.
A Nidhi company has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A Nidhi company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
A Nidhi company enjoys better credibility when compared to Mutual Benefit Organizations. Nidhi companies are registered and monitored by the Central Government. Mutual Benefits Organization are on the other hand governed and monitored by State Governments.
TO BE SUBMITTED BY ALL DIRECTORS