( Expert )
19 December 2012
The provisions of the Companies Act relating to Nidhi Company are Section 620A of the Act and the Notifications issued by Central Government under the Section. As per the Section 620A of the Act, Nidhi Company means a company, which the Central Government, by notification in the Official Gazette, declared it as such. Therefore, a Company has to be incorporated first and then an application has to be made to Central Government for declaring it as a Nidhi Company.
1.Incorporation of a Public limited Company.
2.The objects of the company mentioned in MOA shall cover only those activities permissible for Nidhi Companies as prescribed in the notifications GSR No. 555(E) dated the 26th July, 2001, GSR 308(E) dated the 30th April, 2002.
3.The proposal to apply the Central Government for declaring the Company as Nidhi Company shall be decided by the Board and a resolution should be passed in this regard.
4.Ensure Compliance with all other directions as provided in the above notifications as amended from time to time, including the requirement of minimum number of members.
5.Apply to Central Government in form 63 to declare the Company as Nidhi Company with the documents as mention in the form.
6.The application for declaring a Company as Nidhi Company is processed at the Head Quarters of MCA. The Company will be declared as Nidhi Company once the notification is issued by Central Government u/s 620A (1) of the Act.
Please go through the Notifications issued by Central Government under the above mentioned Section in order to have a clear understanding of the concept of Nidhi Company and the procedure for its formation.