What is the function of Nidhi company?
Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. These companies typically operate in the southern part of the country.
Who are the members of Nidhi company?
What are post incorporation requirement of a Nidhi Company?
- It must have at least 200 members/shareholders.
- Minimum Net Owned Fund should be Rs. 10 Lakhs.
- Unencumbered term deposit must be at least 10\% of the term deposit.
- The ratio of Net Owned Fund to term deposit should not be less than 1:20.
What is the maximum number of members in a Nidhi company?
Minimum of seven members is needed to start a Nidhi Company, out of which three members must be the Directors of the Company….What are the Compliances of a Nidhi Company?
| Form No | Compliance | Due Date |
|---|---|---|
| Form MGT-7 | Annual Return | Within 60 days of the Annual General Meeting. |
Who regulates Nidhi companies?
the Ministry of Corporate Affairs
Nidhi’s are companies under section 620A of the Companies Act, 1956 (Section 406 of the new Companies Bill 2012, as passed by Lok Sabha) and get regulates under the Ministry of Corporate Affairs (MCA).
Is Nidhi Company a banking company?
A nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act, 2013. Their core business is borrowing and lending money between their members.
Why is it called a Nidhi company?
Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit. Nidhi companies existed even prior to the existence of companies Act 2013.
Can Nidhi companies accept deposits?
No Nidhi Company shall accept deposits exceeding 20 times that of its net owned funds as per its last audited financial statements. Tenure of minimum 6 months up to 60 months.
Can Nidhi Company convert into bank?
Here the question arises, whether a Nidhi Company can be converted into a full-fledged NBFC? The answer to this question is ‘no’. A Nidhi Company cannot be converted into an NBFC or Non-Banking Financial Company, because it is neither beneficial nor easily tenable.
Is Nidhi Company safe?
Q. 6) Are the Deposits with Nidhi Company safe and secured? Ans.: Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits.