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Many People Belonging to Middle Class in India are Investing in Nidhi Companies

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In a country like India, where saving money is the primary concern of the public, Nidhi Companies are a great way to help people out. Nidhi Companies deal with the acceptance of deposits and lending of money.

These companies are an answer for all those people who want to open a finance or loan business in India. Nidhi Company Registration is a process through which the incorporation of type of NBFC called Nidhi can be made possible. There is another name for Nidhi Company and it is called Mutual Benefit Finance Company.

The reason why the middle and lower-class people of India are leaning towards Nidhi Company is that it has an easier registration process, and it has several exemptions. Here are some of the benefits of a Nidhi Company.

The registration process of a Nidhi Company takes one to two weeks. It has a short registration process compared to other companies. There are no official complexities involved.

According to the Companies Act, 2013, the directors and shareholders of a Nidhi Company have limited liability. It means if the company goes through loss or financial trauma, then the government does not have the power to seize the company’s assets.

According to the Nidhi Rules, 2014, Nidhi Companies follow few rules imposed by RBI. Even though Nidhi Companies are NBFC, they aren’t answerable to RBI. Moreover, a Nidhi Company is a separate entity. It means in case of legal issues, and it can sue or get sued by anyone. The government won’t get involved in the process directly.

A Nidhi Company enjoys a perpetual existence, and it means even if a member dies, the company continues to exist until it is dissolved. Nidhi Companies are a smart way for the people of India to invest and save their money.

With experience as a full-time environmentalist and part time journalist, Lisa heads the post of editor at California Herald. She covers all the significant proceedings in the world of Environment while editing all the news pieces posted over the website to ensure everything aligns with the journalistic format.

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