“Nidhi
is a company formed with the exclusive object of cultivating the habit of
thrift, savings and functioning for the mutual benefit of members by receiving
deposits only from individuals enrolled as members and by lending only to
individuals, also enrolled as members”
-
Section
406, Companies Act, 2013 & Companies Rules 2014
Nidhi Company are registered or formed
only for the benefit for its members only, an outsider i.e. who is not the
member of the Nidhi Company is not allowed to deposit any money or doing any
kind of business with the concerned Nidhi Company. In this article we will
analyze the impact of Nidhi Companies Rules 2014 on the registration of Nidhi
Company
Incorporation
of Nidhi Company
i)
A
Nidhi Company to be incorporated under the Companies Act, 2013 (“Act”) shall be a public company and with
a minimum paid up equity share capital of five lakh rupees;
ii)
On
and after the commencement of Companies Act, 2013, no Nidhi Company shall issue
preference shares;
iii)
Except
as provided under the provisions of Nidhi Companies Rules 2014, no Nidhi
Company shall have any object in its Memorandum of Association other than 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;
iv)
Every
company incorporated as Nidhi shall have the last words “Nidhi Limited” as part
of its name.
Structure
of Nidhi Company
i)
Within
a period of one year from the commencement of the Nidhi Companies Rules 2014,
every Nidhi Company shall ensure that it has:
a.
Not
less than two hundred members;
b.
Net
Owned funds of ten lakhs or more;
c.
Unencumbered
term deposits of not less than 10% of the outstanding deposits;
d.
Ratio
of Net Owned Funds to deposits of not more than 1:20
ii)
A
Nidhi Company shall not admit a body corporate or trust as member
iii)
A
minor shall not be admitted as a member of Nidhi Company;
iv)
Except
as otherwise permitted under the Nidhi Company Rules, 2014, every Nidhi Company
shall ensure that its membership is not reduce to less than two hundred members
at any time.
Opening
of Branches
i)
Any
kind of public deposit business runs on its branch offices. A Nidhi Company may
open branches, only if it has earned net profits after tax continuously during
the preceding three financial years. A Nidhi Company may open up to three
branches within the district;
ii)
No
Nidhi Company shall open branches or collection centres or offices or deposit
centres or by whatever name called outside the State where its registered
office is situated;
iii)
A
Nidhi Company shall not close any of its branch unless it :-
a.
Publishes
an advertisement in a newspaper in vernacular language in the place where it
carries on business at least thirty days prior to such closure, informing the
public about such closure;
b.
Inform
the Registrar within the thirty days of such closure
Deposits
i)
The
fixed deposits shall be accepted for a minimum period of six months and a
maximum period of sixty months;
ii)
Recurring
deposits shall be accepted for a minimum period of twelve months and a maximum
period of sixty months;
iii)
The
maximum balance in a savings deposit account at any given time qualifying for
interest shall not exceed one lakh rupees at any point of time and the rate of
interest shall not exceed 2% above the rate of interest payable on savings bank
account by nationalized banks;
iv)
A
Nidhi Company may offer interest on fixed and recurring deposits at a rate not
exceeding the maximum rate of interest prescribed by the Reserve Bank of India
which the Non-Banking Financial Companies can pay on their public deposits.
v)
A
Nidhi Company shall not accept deposits exceeding twenty times of its Net Owned
Funds (NoF) as per its last audited financial statements
Loans
i)
A
Nidhi Company shall provide loans only to its members;
ii)
A
Nidhi Company shall give loans to its members only against the following
securities namely:
a.
Gold,
silver and jewellery
b.
Immovable
property;
c.
Fixed
deposit receipts, National Savings Certificates, other Government Securities
and insurance policies
Dividend
A Nidhi Company shall not declare dividend
exceeding 25% or such higher amount as may be specifically approved by the
Regional Director for reasons to be recorded in writing and further subject to
the following conditions, namely:-
i)
An
equal amount is transferred to general reserve;
ii)
There
has been no default in repayment of matured deposits and interest and
iii)
It
has complied with all rules as applicable to Nidhi Companies
For further details on Registration of Nidhi
Companies, please click on the link below:
Or contact us at admin@equicorplegal.com / +91
9958709189
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