2 years ago (2016-09-06 13:28:12)

An Overview on Nidhi Companies under Companies Act 2013

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LexComply

Meaning: As per section 406 of Companies Act 2013 ,“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.

Applicability: These rules shall be applicable to-

(a) 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;

(b) Every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-Section (1) of Section 620A of the Companies Act, 1956; and

(c) Every company incorporated as a Nidhi pursuant to the provisions of Section 406 of the Act.

Pre-incorporation requisite:

1. A Nidhi company to be incorporated under this Act shall be a Public Company.
2. It shall have a minimum paid up equity share capital of Rs.5,00,000/-.

3. No preference shares shall be issued.

4. If preference shares had already been issued by a Nidhi Company before commencement of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares.

5. The object of the company shall be cultivating the habit of thrift and savings amongst its members, receiving deposits from and lending to its members only for their mutual benefits.

6. It shall have the words ‘Nidhi Limited’ as part of its name.

Post-incorporation requisite: Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has – Read more


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