19 September 2014
Hello everyone,
I want to know that at present which type of restrictions are there in formation of nidhi company.
how much chances are there to get nidhi licence from RBI after forming public company.
•A Nidhi company to be incorporated under this Act shall be a public company; •It shall have a minimum paid up equity share capital of Rs.5,00,000/-; •No preference shares shall be issued; 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; •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; •It shall have the words ‘Nidhi Limited’ as part of its name; •Minimum number of members should be 200; •Net owned funds shall be Rs.10,00,000/- or more (‘Net owned funds’ means the aggregate of paid up equity share capital and free reserved as reduced by the accumulated and intangible assets appearing in the last audited balance sheet); •Ratio of net owned funds to deposit shall be not more than 1:20; •Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14;
General restrictions
Rule 6 provides general restrictions. According to this Rule no Nidhi shall-
•Carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate; •Issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever; •Open any current account with its members; •Acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over Nidhi; •Carry on any business other than the business of borrowing or lending in its own name; •Accept deposits from or lend to any person, other than its members; •Pledge any of the assets lodged by its members as security; •Take deposits from or lend money to any body corporate; •Enter into any partnership arrangement in its borrowing or lending activities; •Issue or cause to be issued any advertisement in any form for soliciting deposit; •Pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or the granting loans.
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