27 February 2017
According to rule 4 of Nidhi Rules,2014 ; a Nidhi company shall be a public company and must have a minimum paid up equity share capital of 5 lakh rupees. But Companies (amendment)act,2015 has omitted the requirement for minimum paidup share capital for private and public companies. So considering that Nidhi co. shall be a public company, whether omission of minimum paidup share capital will be applicable to nidhi co. or it will continue to have min.5 lakh as its paidup equity share capital ??? please reply soon
27 February 2017
Omission of minimum capital becomes infructuous by virtue of rule 5(b) of Nidhi Rules, 2014 where in the 'net owned funds' to begin with should be at least Rs.10 lakhs.
04 August 2024
The amendment to the Companies Act in 2015, which removed the requirement for minimum paid-up share capital for both private and public companies, does indeed apply to Nidhi companies as well. Here’s why:
1. **Nature of Nidhi Companies:** Nidhi companies are classified as public companies under the Companies Act, 2013. This classification does not change despite the specific regulatory framework under the Nidhi Rules, 2014.
2. **Amendment to Minimum Paid-up Share Capital Requirement:** The Companies (Amendment) Act, 2015, effectively removed the mandatory requirement for minimum paid-up share capital for both private and public companies. This amendment was intended to promote ease of doing business and remove unnecessary regulatory burdens.
3. **Applicability to Nidhi Companies:** Since Nidhi companies are mandated to be public companies and are regulated under the Companies Act, the amendment regarding minimum paid-up share capital applies to them as well. Therefore, the requirement for Nidhi companies to have a minimum paid-up equity share capital of ₹5 lakh, as stipulated in the Nidhi Rules, 2014 (Rule 4), has been superseded by the Companies (Amendment) Act, 2015.
4. **Effect of Omission:** The omission of the minimum paid-up share capital requirement is applicable to Nidhi companies irrespective of any other regulatory provisions. This means Nidhi companies are no longer required to maintain a minimum paid-up equity share capital of ₹5 lakh. They can operate without any prescribed minimum capital amount, aligning with the broader regulatory framework for companies in India post the 2015 amendment.
In summary, the amendment removing the minimum paid-up share capital requirement applies to Nidhi companies, and they are not required to maintain a minimum paid-up equity share capital of ₹5 lakh anymore. This change aims to streamline regulations and facilitate the functioning of Nidhi companies under more flexible capital structures, similar to other public companies in India.
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