Nidhi Company Rules: Know Your Rights And Duties

A Nidhi company is a type of non-banking financial company (NBFC) that is formed with the sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are regulated by the Ministry of Corporate Affairs and must adhere to specific rules and regulations.

 

Here are some of the rules and regulations that Nidhi companies must follow:

1. Membership Requirements: A Nidhi company must have at least 200 members within one year of incorporation. Members must be individuals and cannot be corporate entities or trusts.

2. Name and Objectives: The name of the Nidhi company must end with the words "Nidhi Limited." The primary objective of the Nidhi company is to encourage thrift and savings amongst its members.

3. Capital Requirement: A Nidhi company must have a minimum paid-up equity share capital of Rs. 5 lakhs.

4. Deposit Requirements: A Nidhi company can only accept deposits from its members. The deposits must have a minimum tenure of six months and a maximum tenure of five years.

5. Interest Rates: The interest rates offered by a Nidhi company cannot exceed the rate prescribed by the Reserve Bank of India (RBI).

6. Lending Restrictions: A Nidhi company can only provide loans to its members. The loans cannot exceed the amount of the member's deposits.

7. Auditing: A Nidhi company must conduct an audit of its accounts every year by a practicing Chartered Accountant.

8. Annual Compliance: A Nidhi company must file its annual returns and financial statements with the Registrar of Companies.

As a member of a Nidhi company, it's essential to understand your rights and duties. Here are some of the key rights and duties:

 

Rights:

1. To attend and vote at general meetings.

2. To receive a share of the profits of the Nidhi company.

3. To inspect the books and records of the Nidhi company.

 

Duties:

1. To pay the required membership fee and deposit.

2. To comply with the rules and regulations of the Nidhi company.

3. To attend and participate in general meetings.

 

In conclusion, Nidhi companies play an essential role in promoting savings and thrift amongst their members. They are regulated by the Ministry of Corporate Affairs and must follow specific rules and regulations. As a member of a Nidhi company, it's crucial to understand your rights and duties to ensure the success and integrity of the organization.