- A Nidhi company belongs to the category of non-banking finance firms.
- Recognized under Section 406 of the Companies Act, 2013, it is governed by the central government.
- 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 down in Chapter XXIV of Company Rules, 2014.
Time frame
5 to 45 working days (subject to govt. approval)
