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Nidhi company is the most popular structure to start finance business for the community and by the community. In this article, We will discuss the checklist for the Incorporation of Nidhi company.
Pursuant to the provisions of Section 406 of the Companies Act, 2013 every Incorporation of Nidhi Company.
There are the following requirements for Nidhi Company Registration:-
Within a period of 1 year from the commencement of these rules, every Nidhi company shall ensure that it has
General Restrictions
Rule 6 provides general restrictions. According to this Rule, no Nidhi shall-
Membership
Share capital and allotment
Rule 7 provides that every Nidhi shall issue equity shares of the nominal value of not less than ₹ 10/- each. This requirement shall not apply to a company which has been declared as a Nidhi company. Provided that this requirement shall not apply to a company referred below:
Every Nidhi shall invest and continue to keep investing, in unencumbered term deposits with a scheduled commercial bank or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month.
In case of unforeseen commitments, temporary withdrawal may be permitted with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such conditions and time limit which may be specified by the Regional Director to ensure restoration of the prescribed limit of 10%.
A Nidhi shall provide loans only to its members. The loans given to a member shall be subject to the following limits:
A Nidhi shall not close any branch unless
Annual returns required to fill by Nidhi Company
Companies Covered under Rule -2 are the following:
Power to enforce compliance with Nidhi company
The penalty for non-compliance of law by Nidhi company
Further, in accordance with Rule 9, every Nidhi shall maintain Net Owned Funds (excluding the proceeds of any preference share capital) of not less than 10 lakh rupees or such higher amount as the Central Government may specify from time to time.
Read our article:Rules Regarding Nidhi Company Setup in India
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