A privately owned and run business is known as a private limited corporation. Small enterprises can use it well. This type of business has only one goal: to increase profits. The mutual benefit society known as Nidhi Company, on the other hand, is a non-banking financial company (NBFC). This type of organization's only goal is to instil the habit of saving among its members.

Definition of Private Limited Company and Nidhi Company

• Private Limited Company

A private limited company, as described in Section 2 (68) of The Companies Act, 2013, is a privately held organisation that offers limited liability to all of its members. A private limited corporation can only have 50 shareholders, bans the public transfer of its shares, and limits the owner's liability to their shareholdings.

• Nidhi Company

According to rule 3(da) of the Nidhi Rules, 2014, a Nidhi Company is a business created to encourage members to practise thrift and saving as well as to lend to and accept deposits from them for their mutual benefit.

Features of Private Limited Company and Nidhi Company

• Private Limited Company

  • Private limited company registration can be done with as few as two members and as many as 200.
  • Members and shareholders are only partially liable.
  • Because a private limited corporation has perpetual succession, its continued existence is unaffected by the passing of its members or directors.
  • The trading of shares is restricted for private limited company registration.

• Nidhi Company

  • The Reserve Bank of India does not require a licence for a Nidhi Company registration.
  • The members' liability is capped to the value of their shares.
  • 200 shareholders are the bare minimum needed to form a Nidhi Company.
  • It might be argued that a Nidhi Company registration gives its shareholders transferable ownership because it permits the transfer of shares.

Requirement of the number of shareholders and directors

The Companies Act of 2013 defines the required total number of shareholders and directors for both the private limited company registration and the Nidhi Company registration, which is why it is included below:

• Private Limited Company

A pvt ltd corporation must have at least two shareholders and directors in order to have private limited company registration. A natural person is qualified to serve as both a shareholder and a director. A corporate legal entity, however, can only become a shareholder.

• Nidhi Company

The minimum number of shareholders and directors needed for a Nidhi company registration is seven and three, respectively.

Capital contribution

The promoters are the ones who complete all necessary steps for the company's incorporation, including the capital contribution. However, the Government of India has set a specific minimum capital contribution level for each of these firms in order to guarantee that the relevant company has sufficient finances to carry out all of the fundamental business activities. The following is mentioned:

• Private Limited Company

The minimum fixed approved share capital contribution by the government for a private limited company is one lakh rupees.

• Nidhi Company

The minimum fixed paid-up equity share capital contribution by the government in the case of a Nidhi Company registration is five lakh rupees.

Documents required for registration

For both the Nidhi Company and the Private Limited Company, registration is required. The Indian government has specified precise document requirements for the incorporation of these types of organisations. The following list includes the documents required to register a Nidhi Company and a private limited company:

• Private Limited Company registration

Scanned and attested copies of the following records belong to the shareholders and directors:

• PAN card information
• Voter id card, an Aadhar card, a passport, a driver's licence, etc.
• A xerox copy of a bank statement or passbook
• A xerox copy of any utility bills, including those for your phone, electricity, gas, etc.
• A passport-sized photo
• The director's signature on a blank paper is a specimen signature.

Scanned and attested copies of the following documents of official records:

• A copy of the recent water or power bill.
• A xerox copy of the property deed or sale deed (only in the case of owned property).
• A xerox copy of the property owner's NoC.
• A xerox copy of the notarized lease (only in the case of a rental office).
• The most current rental payment document.
• Memorandum of Association (MOA).
• Article of Association (AOA).

• Nidhi Company registration

The following documents must be well-attested and xerox copies for Nidhi Company registration in India:

• Directors Identification Number (DIN).
• Directors, members, and shareholder PAN information.
• Directors, members, and shareholders must provide residential proof and addresses.
• Passport-sized photographs of the shareholders, directors, and members.
• The directors, members, and shareholders' official identification documents, such as their voter id card, Aadhar card, passport, driving licence, etc.
• A xerox copy of the rental agreement or lease.
• A xerox copy of the property deed or sale deed.
• A xerox copy of the property owner's NoC.

Things to remember

• The information included in the persons' other forms of identification must match what is on their PAN card.
• Utility bills, or copies of those bills, should not be more than three months old.

Conclusion

A privately held small business entity is a private limited company. It prohibits the transfer of shares and caps membership at fifty. Nidhi Company, on the other hand, is a class of public company with no cap on the total number of members. The Nidhi Company shares are easily transferable, allowing the member to own multiple shares. While Nidhi Companies are established to promote a culture of saving and thrift among their members, private limited companies are established to make a profit. A private limited company can be established and maintained far more easily than a Nidhi Company. However, every type of business is excellent and advantageous in certain ways.

Online Legal India can assist you in flawlessly completing the complete process of private limited company registration and Nidhi company registration. So why are you still waiting? Without any further delay, visit our website!