Nidhi Company works on the principle of mutuality. Which enables its members to accept and deposit funds internally. This company belongs to the non-banking finance sector and it is registered as a public limited company. The sole purpose of this company to soak up the prosperity for thrift and savings among its members. Since the majority of funds originate from the members, deposit along these lines raised by a Nidhi Company. There are certain restrictions and rules are required to be known before incorporating Nidhi Company.
Nidhi Company Incorporation:
Nidhi Company signifies ‘treasure’. It is implies any mutually helpful society that has been advised by the middle, which tries to cultivate the prosperity of the savings. This sort of organizations are mainly popular at the southern part of India. It is generally incorporated as a Public Limited Company. To incorporate Nidhi Company it is vital to have at least 200 members respectively. Furthermore, within one year of its existence, the Net owned fund should be minimum Rs. 10 Lakhs. The ration of Net owned fund would be not more than 1:20 respectively. It must have a minimum paid- up share capital of Rs. 50,000. The name must be contained ‘Nidhi Limited’. Unhampered term deposits ought to be under 10% of the exceptional deposits, in this manner specified in Rule 14.
Documents are required for an incorporation of Nidhi Company:
Proof of the registered place of business (Ownership documents/ rent or lease agreement)
• No Objection Certificate (signed by the owner/ landlord)
• Identity proofs
• Address proofs of the members
• Photos of the members
• PAN card copies of the members
• Digital Signature (DSC)
• Director Identification Number (DIN) of the directors
• Memorandum of Association of the company (MoA)
Limitation as per Rule 6:
A Nidhi Company is Restricted from Undertaking any of the Activities Stated Below:
To attempt the matter of chit funds, hire purchase, renting money, insurance or procurement of securities.
• To issue preference shares or debentures.
• To open the current account of the member.
• To accept deposit or loan cash to any individual other than its individuals.
• To issue any sort of advertisement.
• To go into any understanding or pay financier to request any sort of deposits.
• Pledging any of the advantages put together by its very own individuals as security.
• Pay any brokerage or incentives for mobilizing deposits from members or for granting loans.
• Charge rates of interest exceeding 7.5% respectively.
• Not declare dividend exceeding twenty-five percent.
• Enter into a partnership of borrowing money and securities.
Conditions to Deposit:
The conditions that every Nidhi Company should comply with before granting loans are listed below;
Rules Relating to Directors:
Whom can a Nidhi Company provides loan? To only its members. Condition for providing loans to the members are listed below;
Provided further that a member shall not be eligible for any further loan if he has borrowed any earlier loan from the Nidhi and has defaulted in repayment of such loan.
Application form for Deposit:
Every application form for deposit with a Nidhi shall contain the following particulars, namely-
Proof of Identity:
(ii) Unique Identification Number
(iii) Income-tax PAN card
(iv) Elector Photo Identity Card
(v) Driving licence
(vi) Ration card
Proof of address (any one of the following)
(ii) Unique Identification Number
(iii) Elector Photo Identity Card
(iv) Driving licence
(v) Ration card
(vi) Telephone bill
(vii) Bank account statement
(viii) Electricity bill.
The article shows all the information that are beneficial for the members who are going to incorporate Nidhi Company. If you want to take a help regarding Nidhi Company registration, feel free to contact at Unilex Business consultant. Here the professionals will help you in incorporating Nidhi Company and other related issues.
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