24 Jun 2021, 11:27 — 6 min read
NIDHI stands for National Initiative for Developing and Harnessing Innovations. It is a financial institution or a type of NBFC that is involved in depositing and lending money to their members. This company is registered under the Companies Act, 2013 and is managed according to the RBI’s guidelines. All the transactions are performed by the company’s members only.
Nidhi Company registration and regulation is as per Section “406” of Companies Act 2013 and Nidhi Rules, 2014 issued by the Ministry of Corporate Affairs (MCA), India.
Nidhi shall have objects in its Memorandum of Association (MOA) only “cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.”
Like any other Company the process is as follows:
The ROC / MCA fee is like any other Company.
RBI has exempted Nidhi Companies from the core provisions or regulations applicable for NBFCs.
1.Preference shares shall not be issued by Nidhi Company.
2. Every Nidhi must, within a period of one year from the commencement meet all of the following criteria:
3. Nidhi companies shall not:
(a) carry on the business of:
hire purchase finance,
acquisition of securities issued by any body corporate;
(b) open any current account with its members;
(c) issue preference shares, debentures etc
(d) issue any advertisement for soliciting deposit
(e) pay any brokerage or incentive for mobilising deposits
1) shall issue fully paid-up equity shares only
2) nominal value shall be ten rupees each
3) shall issue minimum 10 shares to deposit holders or shares equivalent to 100/-
4) savings account holder shall hold at least 1 equity share of 10/-
5) recurring deposit account holder shall hold at least 1 equity share of 10/-
Also read: What is Legal Entity Identifier (LEI)
To explore business opportunities, link with me by clicking on the 'Connect' button on my eBiz Card.
Image source: shutterstock.com
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy, or position of GlobalLinker.
Posted byAnil Kumar Ganga
"Ananya legal LLP" is a full service, dynamic, and trustworthy Corporate Advisory and Legal Consultancy Limited Liability Partnership (LLP) Firm that specializes in a...
Process of Trademark Registration in India
21 Apr 2022, 09:09
Registration of NGOs for CSR funds and undertaking CSR activities
13 Apr 2022, 16:38
Most read this week
Please login or register to join the discussion