by Audit Analyst | Oct 13, 2025 | Nidhi Company
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...
by Audit Analyst | Oct 13, 2025 | Nidhi Company
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...
by Audit Analyst | Oct 13, 2025 | Nidhi Company
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...
by Audit Analyst | Oct 13, 2025 | Nidhi Company
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...
by Audit Analyst | Oct 13, 2025 | Nidhi Company
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...
