Nidhi Company

  • Easy Management
  • Better Credibility
  • Uninterrupted Existence
  • A Nidhi Company to be incorporated under the Act shall be a public company and shall have a minimum paid up equity share capital of five lakh rupees. If preference shares had been issued by a Nidhi before the commencement of this Act, such preference shares shall be redeemed in accordance with the terms of issue of such shares. Nidhi companies are allowed to take deposit from its members and lend to its members only. Therefore, the funds contributed for a Nidhi company are only from its members (shareholders) and used only by the shareholders of the Nidhi Company.

    Except as provided under the provision to sub-rule (e) to rule 6, no Nidhi 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.

    Every Company incorporated as a "Nidhi" shall have the last words 'Nidhi Limited' as part of its name.

    Requirements for Nidhi Company

    Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has-

  • Not less than two hundred members;
  • Net Owned Funds of ten lakh rupees or more;
  • Unencumbered term deposits of not less than ten per cent. of the outstanding deposits as specified in rule 14; and
  • Within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH-1 along with such fee as provided in Companies (Registration Offices and Fees) Rules, 2014 with the Registrar duly certified by a company secretary in practice or a chartered accountant in practice or a cost accountant in practice.

    Limitations

    No Nidhi shall-

  • carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by anybody corporate;
  • issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
  • open any current account with its members;
  • acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;

    Every Nidhi shall maintain Net Owned Funds(excluding the proceeds of any preference share capital) of not less than ten lakh rupees or such higher amount as the Central Government may specify from time to time.