Limited liability means limited responsibilities. When we talk about the liabilities it is congested to the amount of their total investment to the company. The personal properties or assets do not influence the debt of the company. The personal things are not used to combine with the company responsibilities and debts.
The members of the company contribute some funds and from those funds, they make loans at simple interest.
The Mutual Benefit society enjoys a separate legal existence. The company and the members are vitally different. The company can own the assets and make the transactions by its own name. The debt also experiences in its own name. Thus in this way, it possesses separate legal existence.
Nidhi Company is a Public limited company and the main purpose of this sort of company includes depositing, accepting and lending money to its members. It is a Non-Banking Financial Company (NBFC) released from the provision of the RBI.
Once the Nidhi Company is registered it is existence until the annual compliance is met on a regular basis. If the annual compliance is not fulfilled then the company becomes an undeveloped company and may strike off from the register after a period of time. The undeveloped one can be revitalized for a period of 20 years.
There is no restriction to become the director of the company. Nidhi Company is totally hassle-free and there is no worry about the restrictions.
The minimum capital amount to start a Nidhi company is Rs. 500000 and there are no limits on the maximum capital.