F&Q on Nidhi Company
Q. 1)What is Nidhi Company?
Ans.: A Nidhi Company is a Company which carries on the matter of business and deposit the equivalent on interest. Nidhi Company is like NBFC yet the main fundamental contrast between the two is that Nidhi Companies accept deposit just from its members. The primary point of these organizations is to work for the shared advantage of its individuals. These organizations are not qualified for carry on the matter of Hire Purchase Financing, Insurance, Chit Funds, and Acquisition of protections or Issue of any Debt Instruments.
Q What arrangements are appropriate to Nidhi Companies?
Ans.: Following arrangements are appropriate to Nidhi Companies.
As they are consolidated into the idea of Public Company so standards and guidelines of Companies Act, 2013 are pertinent.
RBI arrangements identified with Interest rate payable on deposit are applicable to Nidhi Companies. But, the core provision of RBI are not relevant to Nidhi Companies as RBI has exempted the Nidhi Companies from the equivalent.
Nidhi Rules, 2014.
Ans.: As to incorporate a Nidhi Company it is to be registered as a Public Limited Company. Thus, to join a Nidhi Company it is important to satisfy following criteria:
It ought to have in any event 3 Directors.
It ought to have in any event 7 Members.
The fundamental goal to be written in the MOA ought to be to cultivate the habit for thrift and investment funds among its individuals. What's more, it can accept deposit and loan cash just to its individuals and will work for the shared advantage of its individuals.
Q What are the Documents required to form a Nidhi Companies?
Ans.: Following are the documents required for Nidhi Company Registration:
Digital Signature Certificate of all the Directors.
Directors Identification of all the Directors.
Copy of a PAN Card.
Copy of Identity Proof (i.e. Voters ID Card, Driving License, Aadhar Card).
2 Passport size photograph.
Registered Office Address Proof (Electricity Bill, Telephone Bill).
If the registered address is a rented premise then rent agreement with rent receipt
Q What are the loans under Nidhi Company?
Fund lending is a noteworthy feature for a Nidhi Company. Here are some significant focuses:
1. The most extreme loan to one individual won't surpass Rs. 200,000 if the store is under 2 crore.
2. A Nidhi Company can't give any unsecured loan or a micro finance loans.
3. The maximum period of a gold credit is 1 year.
4. Reimbursement period for an advance against property can't surpass 7 years.
5. Most extreme gold credit can be 80% of the estimation of the gold.
6. Most extreme credit against a property can't surpass half of the value of the property.
7. A Nidhi Company can't give vehicle loans.
Q What are the acceptance of deposits under Nidhi Company?
The acceptance of deposits one of the significant features for a Nidhi Company and, along these lines, one must hold the Nidhi rules. Here are some significant points:
1. A fixed depoits can be accepted for at least a half year and a limit of 60 months.
2. A repetitive deposits can be accepted for at least a year and a limit of 60 months.
3. A maximum balance on which the intrigue is given under the bank account can't surpass Rs. 100,000.
4. The points given under are additionally significant for reimbursement of depoits:
a) No store is to be reimbursed inside 3 months.
b) If the stores are reimbursed before development, at that point the intrigue gave will be diminished by 2 percent.
What are the general restrictions of Nidhi Company?
- No Nidhi Company enables the business of chit fund, hire purchase finance, insurance issued by the corporate body ,and acquisition of securities.
- No Nidhi Company issues preferences, shares, debentures, or any other debt instruments by any name or in any other form.
- Nidhi Company is prohibited from accepting deposit from the general public and offer loan to the public.
- Nidhi Company shall not open current account with its members.
- Just like other financial institutions, a Nidhi Company is restricted from advertising itself related to the deposits.
- They are not allowed to acquire any other company unless they have obtained the approval of Regional Director.
- They are not allowed to carry on any business activity other than borrowing or lending.
Does Nidhi Company has branches?
The parts of Nidhi Company must be opened when it has earned a net profit after tax ceaselessly during three preceding years.
• After the time of three years is elapsed by the Nidhi company can open up to 3 branches in the locale.
• Nidhi Company can possibly open its branches when it has appropriately presented a budget summary and the yearly come back with the Registrar.
How long is the company valid for?
When a company gets incorporated, it is active and in-presence for whatever length of time that the yearly compliances are met with normally. In a situation where the yearly compliances are not agreed to, the organization turns into a dormant company and then it might be struck off from the registrar after a timeframe. A struck-off organization can be resuscitated for a time of as long as 20 years.
Q Interest Rates on loans
There are basically three types of loans which are given by a Nidhi Company.
1. Gold/Silver credit: Maximum rate ought to be 7.5% in addition to the maximum rate given on deposits . for example 7.5% + 12.5% = 20%.
2. Credit against property: Maximum rate ought to be 7.5% in addition to the greatest rate given on deposits. for example 7.5% + 12.5% = 20%
3. Different Loans (incorporates against FD): Maximum rate ought to be 7.5% in addition to the maximum rate given on deposit . for example 7.5% + 12.5% = 20%
I hope now you understand the F&Q on Nidhi Company. Feel free to contact us anytime for Nidhi Company registration in India and other related issues.