Criteria to start Nidhi Company

Criteria

  • They must not be having but two hundred members or shareholders, by whichever name referred to as.
  • Unencumbered deposits shouldn’t be but 100% of the outstanding deposits.
  • Internet in hand funds * shouldn’t be but ten laks.
  • Internet in hand funds to deposits magnitude relation shouldn’t be quite 1:20
  • If Criteria are satisfied:   If the Nidhi-Company satisfies the upper than criteria than company shall need to be compelled to file a are available in due of statutory compliances as kind NDH-1 duly certified by CA or metal or ICWA by paying requisite fees on the mythical creature computer, at intervals ninety days from the shut of the first twelvemonth or from starting of the second twelvemonth.

 

  • If Criteria aren’t satisfied:   If at the tip of the primary yr., if Nidhi-Company isn’t ready to satisfy the higher than needs than the Nidhi-company have to be compelled to apply to Regional Director in type NDH-2 for the extension of your time from thirty days of the shut of monetary year.

Nidhi Pedia:

Nidhi within the Indian context means that treasure. However, within the Indian money sector it refers to any mutual profit society notified by the Central / Union Government as a Nidhi Company.

They are created in the main for cultivating the habit of thrift and savings amongst its members.

The businesses doing Nidhi business, viz. borrowing from members and loaning to members only, are best-known underneath as Nidhi Company

Nidhi Company are shaped just for the good thing about its members solely, on outsider i.e. who is not The members of the Nidhi Company don’t seem to be allowed to deposit any cash or doing any kind of business with the involved Nidhi Company.

Nidhi Company Vital Points:

A Nidhi Company shall not admit a body company or trust as a member.

Except as otherwise allowable below these rules, each Nidhi Company shall make sure that its membership isn’t reduced to but 2 hundred members at any time.

Each Nidhi Company shall make sure that its membership isn’t reduced to but 2 hundred members at any time.

A minor shall not be admitted as a member of Nidhi Company

NIDHI COMPANY ACT 2013

Extract of the relevant provisions prescribed in Section 406 of the Companies Act, 2013 as under:-

Nidhi suggests that a corporation that has been incorporated as a Nidhi with the item of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and disposition to, its members solely, for his or her mutual profit, and that complies

With such rules as area unit prescribed by the Central Government for regulation of such category of companies.

Each Company that had been declared as a Nidhi Company or Mutual profit Society under sub-section (1) of section 620A of the businesses Act, 1956

  • Each Company incorporated as a Nidhi Company consistent to the provisions of section 406 of the Act.
  • each company performing on the lines of a Nidhi Company or Mutual profit Society but has either not applied for
  • Each Company incorporated as a Nidhi Company consistent to the provisions of section 406 of the Act.

Deposits accepted by Nidhi company

The deposits shall be accepted for a minimum amount of six months and a most period of sixty months.

  1. Revenant deposits shall be accepted for a minimum amount of twelve months and a maximum amount of sixty months.
  1. the most balance during a savings account at any given time qualifying for interest shall not exceed one large integer rupees at any purpose of your time and also the rate of interest
  1. Shall not exceed 2 per cent. On top of the speed of interest owed on savings checking account by nationalized banks.
  1. A Nidhi could provide interest on mounted and revenant deposits at a rate not exceptional the maximum rate of interest prescribed by the bank of India that the NBFC will pay on their public deposits.

Rules and regulations of Nidhi Company:

Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956

  • Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956;
  • every company incorporated as a Nidhi pursuant to the provisions of section 406 of the Act

General Limits:

  1. Carry on the business of invoice fund, rent purchase finance, leasing finance, insurance or acquisition of securities issued by anybody corporate;
  2. Issue preferred stock, debentures or the other document by any Name or in any type whatsoever;
  3. Open any accounting with its members;
  4. Acquire another company by purchase of securities or management the composition of the Board of administrators of the other company in any manner whatsoever
  5. Pledge any of the assets lodged by its members as security;
  6. Take deposits from or lend cash to anybody corporate.
  7. Enter into any partnership arrangement in its borrowing.

Objectives of “Nidhi Company”

“Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Government for regulation of such class  of companies.

  • The primary object of Nidhi’s is to hold on the business of accepting deposits and disposal cash to member-borrowers solely against jewels, etc., and mortgage of property.
  • Nidhi’s on account of their money and body strength have opened branches inside the various revenue district and even outside.

Nidhi Facts:

  • A Nidhi Company must have a minimum of 200 shareholders
  • A Nidhi company must have unencumbered term deposits of not less than 10% of the outstanding deposits
  • A Nidhi must have net owned funds of ten lakh rupees or more
  • Minimum 7 Shareholders and 3 Directors are required to incorporate the Nidhi Company
  • Nidhi can issue only rights shares and unsubscribed portion of rights issue can be apportioned by the Board of Directors as per the existing law
  • A Nidhi Company must ensure that the number of membership should feature a minimum of 200 shareholders.
  • Nidhi Investments for minors can only be done where the legal guardian is a member of the Nidhi
  • Nidhi members should not exercise over and above 10% of the total voting rights of all shareholders
  • Every Nidhi Company shall issue the equity shares of a minimum value of Rs10
  • The Nidhi Company should not be allowed to issue any new preference shares at any time.

Nidhi Company is A Unique Concept

Nidhi Companies in India were created for cultivating the habit of small savings targeted at the lower and middle class.

Its investment structure consists of realigning funds within a growing group of members who benefit from returns at fixed durations.

The contributions of funds generated in Nidhi investments are realized from its members (shareholders).

Nidhi companies are minute when compared to the banking sector and promotes the cultivation of savings amongst a group of people.

Features:

Promotes small savings among middle and lower middle class

Accepts term deposits for timely returns

Easy source of loan to members against collateral

Effective means of savings and loans with minimum documentation.

Secured means of investment due to rigid membership structure

Why Nidhi Company should be registered?

  • The members have limited liability which is extended up to the amount they have contributed or invested in the company.
  • They are liable only for their share in the company. Personal Assets are beyond the reach of liability.
  • They cannot be utilized for meeting the liability of the company.
  • Funds contributed by members is available for the members themselves at lower interest rates.
  • A registered Mutual Benefit Society enjoys separate legal existence.
  • The company can buy, sale, or acquire assets in its own name, it can also incur debt in its own name, and also it can sue or be sued in its own name.