Section 406 of Companies Act 2013 and Companies (Nidhi Companies) Rules, 2014 governs The Law and Procedure for Nidhi Company.
Nidhi Companies are monetary business companies operating in India and can be classified as Non Banking Financial Companies (NBFC) and Banking Companies. Nidhi company works through its members and it borrows and lend money only to its members.
And like other banking and financial companies, it does not require to get any licence from Reserve bank of India.
Companies is governed/ruled by the Central Government. Reserve Bank of India (RBI) is empowered to give directions regarding the matters related to acceptance of deposits.
Nidhi company shall be incorporated through spice form.
DOCUMENTS REQUIRED FOR INCORPORATION:
- Aadhar card of all Directors.
- Pan card
- Identity proof- voter id/ passport/ driving licence
- Residence proof- electricity bill/ telephone bill/ bank statement
- Passport size photograph
- Signatures
- Registered office address proof
- NOC from the owner of the premises of registered office
- Utility bill
- Affidavit by all directors
- Declaration by all directors
- Inc-9
- Inc-10
- DIR-2
- KYC from all directors
Requirement to be registered as a Nidhi Company:
- Nidhi company should be registered as public company.
- No minimum capital requirement earlier it was Rs. 5,00,000..
- Nidhi company shall not issue preference share capital.
- Nidhi company shall issue equity capital with nominal value of not less than Rs. 10.
- It must keep Nidhi Limited in its name.
- The Nidhi company must incorporate with object of cultivating the habit of thrift.
- Nidhi company shall not accept deposit exceeding 20 times of its net owned asset as per the last audited financial statement.
- Nidhi company shall provide loan only to its members at predefined conditions.
- Nidhi company shall not declared dividend more than 25% or such higher amount as may be prescribed by Regional director.
- Director of the Nidhi company must be its member and its tenure is maximum 10 years after that he shall be eligible for re-appointment after passing of 2 years.
- After incorporation, nidhi company must add 200 members and it will not fall short during any period of time.
- Minor shall not eligible to become member of Nidhi company.
- Nidhi company shall not carry any other business than borrowing and lending.
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