1. Regulatory Authority under the Companies Act, 2013 The Ministry of Corporate Affairs (MCA) is the central regulatory body responsible for governing and overseeing Nidhi Companies. MCA regulates Nidhi Companies under Section 406 of the Companies Act, 2013. It has...
1. Digital Member Management and Onboarding Nidhi Companies can implement membership management software to streamline onboarding, maintain records, and issue share certificates digitally. Use of online KYC verification tools ensures secure and compliant member...
1. Meaning and Legal Nature Deposits in a Nidhi Company refer to the amounts accepted from members under specific schemes like savings, fixed, or recurring deposits. Contributions refer to the initial capital or share subscriptions made by members to become part of...
1. Verification of Membership and Compliance with Member Limits Confirm that the company has a minimum of 200 members within one year of incorporation. Verify the register of members, membership forms, and supporting documents. Ensure that only individuals are...
1. Voluntary Closure through Strike Off under Section 248 A Nidhi Company may apply for closure by applying strike off under Section 248 of the Companies Act, 2013. This applies when the company has ceased all business operations for at least one year. The Board must...
1. Legal Status and Listing Restrictions Nidhi Companies are classified as non-banking financial entities with a mutual benefit character. They are incorporated as public limited companies under the Companies Act, 2013. Despite being public companies, they are...
1. Objective and Purpose A Section 8 Company is formed for promoting charity, education, science, art, religion, or social welfare, and operates on a non-profit basis. A Nidhi Company is formed to promote the habit of thrift, savings, and mutual financial benefit...
1. Understanding Regulatory Restrictions A Nidhi Company is governed by Section 406 of the Companies Act, 2013, and Nidhi Rules, 2014. It cannot convert into any other type of financial company (like NBFC, chit fund, or microfinance) without surrendering its Nidhi...
1. General Rule on Conversion A Nidhi Company cannot freely convert into any other type of company without regulatory restrictions. Since it is registered with a specific object of mutual benefit and governed by Section 406 of the Companies Act, 2013, it has limited...
1. Permissibility under Nidhi Rules Nidhi Companies are permitted to offer savings account facilities only to their registered members. The collection of savings deposits is governed by Rule 11 of the Nidhi Rules, 2014. These accounts are part of the company’s mutual...