Difference between Mutual Funds and Nidhi Company

Mutual Fund and Nidhi Company are two definite form of business. They are different from each other in terms of their aim, and the nature of the business. Mutual fund and Nidhi Company has a major divergence which is that the Nidhi Company is entitled to deal only with its members. In the case of mutual fund, there is no such restriction. Nidhi Company nature of business is lending and borrowing of money in between its members only. In Mutual fund business, the money can be received from any investors, henceforth welcoming the deposits and making investments. To build up a profitability savings, self-reliance among the individuals, individuals choose Nidhi Company. To win on the investments, individuals put resources into Mutual Funds. A Nidhi Company develops the habit of savings amongst its members. In the case of Mutual Fund, its main objection is to increase the wealth of the depositors. The deposits received from lending the money to the members of the Nidhi Company can only be used by the Nidhi Company. In the case of Mutual Fund, it can use the amounts of deposits received for making investments or use in chit funds, hire purchase, leasing finance.

Secretarial Compliance and Annual Compliance for a Nidhi Company

The most important Compliance for a Nidhi Company is that a Nidhi Company should file ITR Return in a Form NDH-1 within a time span of 90 days from the end of its first financial year after the Nidhi Company is incorporated. If the ITR Return is not filed within the time period then an application to the regional director is given with a fee for the extension of time.

The main purpose of the Annual Compliances is to give a clear image of the company’s work position and performance during a certain time. Under the Companies Act 2013 and Nidhi Rules 2014, a Nidhi Company needs to meet all the compliances. To avoid penalties under the law for non-compliance, a Nidhi Company Annual Compliance is done annually. Annual Compliances of Nidhi Company helps in forming a correct perception of the Company’s working specimen and performance. It is mandatory for all Nidhi Company to have an Auditor Certificate which certifies that the company has complied with the Companies Nidhi Rules 2014 and if not complied with those rules should declare the same. The Auditor Certificate will be annexed to the Auditor report of the company.

What are the Documents Required for Nidhi Company Registration?

Documents Required for Nidhi Company Registration

  • PAN card copy (Self-attested).
  • Four Photographs.
  • Address Proof like Landline Bill, Mobile Bill, Bank Pass Book/ Bank Statement & Electricity Bill (Self-attested copy of any one)
  • Identity Proof like Passport, Driving License, Voter ID & Aadhaar Card (Self-attested copy of any one)
  • Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill AND Rent Agreement (if rented) AND NOC for doing Business & for taking Registration.