Nidhi Company is used to incorporate the savings cultivation within the group of the members of the Nidhi Company. Nidhi Company is allowed to borrow the money from its members and lend the money to the members. Nidhi companies are Limited Registered Companies involving in taking the deposits and lending the money to the other members in the Company. Nidhi Companies are like the NBFC.
Nidhi companies cannot carry the chit funds activities. Cannot issue any debentures or shares, Nidhi company cannot acquire another company or control any board of other company. Nidhi company cannot accept or lend money to other people than its own members.
Nidhi Company requires three directors and seven shareholders to incorporate a Limited Liability company. Nishi company must meet certain criteria within one year of time which is not having members less than 200 shareholders, Have funds of 10 Lakhs Rs/- or more than that.