{"id":38075,"date":"2021-11-22T17:51:06","date_gmt":"2021-11-22T12:21:06","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=38075"},"modified":"2021-11-22T17:51:08","modified_gmt":"2021-11-22T12:21:08","slug":"difference-between-one-person-company-vs-nidhi-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/","title":{"rendered":"Difference Between One Person Company Vs Nidhi Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">To\nstart a business is a complex task; funding or investing capital in a company\nis the most complicated task in India; without collateral, it is difficult to\nget a loan from a bank or any other financial lending body in India. Let&#8217;s\ndifferentiate One person company vs Nidhi company. The simplest form of\nbusiness carried by the individual is the one-person Company, where the founder\nof the Company is individually liable for the Company&#8217;s debt. Still, the\nliability shall be limited to the extent of share capital. On the other hand,\nNidhi Company is a non-banking financial firm with a corporate structure that\nfocuses on lending and borrowing money among its members. Nidhi company is a\ntype of NBFC that requires three directors and seven shareholders. Scroll down\nto check further the difference between a One person Company Vs Nidhi\nCompany.&nbsp;&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/#What_do_you_mean_by_One_person_Company\" >What do you mean by One\nperson Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/#Characteristics_of_One_Person_Company\" >Characteristics of One Person\nCompany<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/#What_do_you_mean_by_Nidhi_Company\" >What do you mean by Nidhi Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/#Essential_Features_of_Nidhi_Company\" >Essential Features of Nidhi Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/difference-between-one-person-company-vs-nidhi-company\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_you_mean_by_One_person_Company\"><\/span>What do you mean by One\nperson Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s began with the definition of <a href=\"https:\/\/corpbiz.io\/one-person-company\"><strong>One Person company<\/strong><\/a> to differentiate between One Person Company Vs Nidhi Company. \u00a0One person company defined under section- 2(62) of the companies act 2013 One person company working as a company with only one shareholder as its member. When a company has only one founder or promoter, a One person company is founded. Because of the numerous benefits that one person provides, entrepreneurs who are just starting their enterprises prefer to form one-person companies over sole proprietorships.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Characteristics_of_One_Person_Company\"><\/span>Characteristics of One Person\nCompany<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a\none-person company, only one person is a member. Under the Companies Act of\n2013 introduced a new dimension in the form of the Person Company. It indicates\nthat a corporation can only have one stakeholder. Because the Companies Act of\n1956 did not include the idea of OPC, a corporation like OPC lacked corporate\nliability. Before the 2013 act, sole proprietorship was the concept if one\nindividual needed to create or operate their own business. Still, it is\ndifferent from OPC in that it did not have access to the benefits provided by\nthe Companies Act.&nbsp;<\/p>\n\n\n\n<p><strong><em>Name of\nthe One Person Company<\/em><\/strong><\/p>\n\n\n\n<p>Section\n12 of the companies act 2013 is concerned with the name of a company, whether\nnaming a public, private, or one person. It should be mentioned whenever the\nCompany&#8217;s name is referenced. Similarly, whether the name is printed, attached,\nor engraved, &#8216;One Person Company&#8217; should be inscribed in brackets under the\nname of the Company.&nbsp;<\/p>\n\n\n\n<p><strong><em>Directors\nof the Company<\/em><\/strong><\/p>\n\n\n\n<p>Companies\nshould have a board of directors, and in a private Limited Company, there must\nbe at least two directors, and as far as public Limited Company is concerned,\nthere must be at least three directors. Minimum one Director and a maximum of\n15 directors are required for the OPC. The Company&#8217;s first director shall be a\nmember as stated in the Memorandum of Agreement of the Company.&nbsp;<\/p>\n\n\n\n<p><strong><em>Meetings\nand nominee of the Company<\/em><\/strong><\/p>\n\n\n\n<p>Under\nsection 96 of the Act mandates that annual general meetings be held within a\nspecified time frame. However, OPCs are particularly exempt from having public\nmeetings after each financial year. Therefore this is not a requirement. In the\nsituation of OPC, when there is more than one Director, Section 173(5) of the\nAct mandates that a board meeting be held every six months of the calendar\nyear, with a minimum space of ninety days between appointments. The decision of\nthe general meetings is regarded as accepted or passed when it is signed by the\nCompany&#8217;s sole member and is then transmitted to the rest of the members. The\nCompany has a rule that allows it to continue indefinitely. During the\nregistration of the One Person Company, the Company&#8217;s only member nominates a\nnominee. This is a characteristic that distinguishes OPCs from all other forms\nof business.<\/p>\n\n\n\n<p><strong><em>Formation\nof One Person Company<\/em><\/strong><\/p>\n\n\n\n<p>A\nsingle individual can form an OPC by signing the Memorandum of Association and\nsatisfying the other requirements outlined in the Companies Act of 2013.\nSuppose the original member dies or becomes incapable of entering any contract.\nIn that case, the MoA must additionally reveal all the details of a nominee who\nwill become the Company&#8217;s sole member. In addition to the registration\napplication, the MoA and the nominee&#8217;s consent to his nomination must be given\nto the Registrar of Companies. That nominee has the right to withdraw his name\nat any moment by making the necessary application to the Registrar. The members\nhave the option to cancel their membership at any time.<\/p>\n\n\n\n<p><strong>Documents\nrequired for Registration of OPC<\/strong><\/p>\n\n\n\n<ul><li>The\nArticles of Association (AOA) establish the Company&#8217;s operating\nprocedures.&nbsp;<\/li><li>The\nmemorandum of Association (MOA) these are the Company&#8217;s objectives or a\nbusiness statement for which the firm will be incorporated.<\/li><li>&nbsp;Because there is only one Director &amp; one\nmember, a nominee on behalf of such a person or individual must be nominated so\nthat if he becomes incompetent or dies and cannot discharge his obligations,\nthe nominee will act in his place. Along with his PAN card &amp; Aadhar card,\nhis consent in Form INC \u2013 3 would be taken.<\/li><li>&nbsp;Proof of the proposed Company&#8217;s registered\noffice, proof of ownership, and a letter of authorization from the owner.<\/li><li>&nbsp;Declaration and Consent proposed under INC-9\nand DR-2<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_you_mean_by_Nidhi_Company\"><\/span>What do you mean by Nidhi Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let\u2019s\nunderstand the meaning of nidhi company by differentiating One Person Company\nVs Nidhi Company. A Nidhi company is a non-banking financial firm (NBFC) with a\ncorporate structure that focuses on lending and borrowing money among its\nmembers. Nidhi company is primarily formed to encourage members to save money\nfor their mutual benefit. Nidhi is known to be a mutual benefit company, it is\nhighly secure and user-friendly, and the primary source of funds is\ncontributions from members. Nidhi company is a type of NBFC that requires three\ndirectors and seven shareholders. As per Section 406 (Companies Act, 2013),\nrecognized Nidhi Company. It is a corporate structure governed by the Ministry\nof Corporate Affairs and falls under section 20A of the Companies Act of\n1956.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Essential_Features_of_Nidhi_Company\"><\/span>Essential Features of Nidhi Company<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Nidhi Company was established solely to encourage the practice of saving for the mutual benefit of its members. The members&#8217; contributions are the primary source of funding for the Nidhi Company. <a href=\"https:\/\/corpbiz.io\/nidhi-company-registration\"><strong>Nidhi Company registration<\/strong><\/a> is quick and straightforward. It is particularly popular in India&#8217;s southern states.<\/p>\n\n\n\n<p><strong><em>The\nbelow are the features of Nidhi company:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Nidhi company should always be a public limited company<\/li><li>Lending and borrowing money is restricted to members only.<\/li><li>\u00a0Through the <strong><em>Ministry of Corporate Affairs<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Ministry_of_Corporate_Affairs\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>, it was made legal.<\/li><li>\u00a0It does not require RBI permission.<\/li><li>\u00a0However, it is correct to raise concerns about deposit acceptance operations.<\/li><li>\u00a0The minimum capital necessary to incorporate a Nidhi Company is 5 lakh.<\/li><li>\u00a0It was founded in 2014 and is governed by Nidhi rules.<\/li><li>\u00a0To form the Nidhi Company, there must be at least 200 members.<\/li><li>\u00a0A minimum of Rs.10\/- shall be paid to members of a Nidhi company that has been approved with equity shares.\u00a0<\/li><\/ul>\n\n\n\n<p><strong><em>Documents\nRequired for the registration of Nidhi Company<\/em><\/strong><\/p>\n\n\n\n<ul><li>AOA-\nArticle of association&nbsp;<\/li><li>&nbsp;MOA- Memorandum of Association&nbsp;<\/li><li>&nbsp;DIN of Directors<\/li><li>&nbsp;Property documents \/rent agreement\/lease\nagreement<\/li><li>NOC of\nOwner\/Landlord<\/li><li>PAN of\nthe members of the Company<\/li><li>Address\nproof of the members&nbsp;<\/li><li>Identity\nproof<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is to be concluded that both the companies One person company and Nidhi company (One Person Company Vs Nidhi Company) are different types of companies that fall under the companies act 2013. Under the companies act 2013, the Nidhi company falls under section 406\u00a0and One person company defined under section 2 (62) of the companies operate 2013. In India, Nidhi company is popularly registered as a public limited company. A One Person Company can never be changed into a Section 8 or a Nidhi Company, according to the Companies Act of 2013. There is no resemblance between these businesses. The common feature between both the companies would be subject to the Companies Act of 2013.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-opc-online\/\">Benefits of OPC (One Person Company) <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To start a business is a complex task; funding or investing capital in a company is the most complicated task in India; without collateral, it is difficult to get a loan from a bank or any other financial lending body in India. Let&#8217;s differentiate One person company vs Nidhi company. The simplest form of business [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":38083,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[31,157],"tags":[2030],"acf":{"service_id":"4"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4386,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38075"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=38075"}],"version-history":[{"count":24,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38075\/revisions"}],"predecessor-version":[{"id":38102,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/38075\/revisions\/38102"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/38083"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=38075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=38075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=38075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}