Registration under section 620a

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CA Shruti Gupta (Querist)

10 March 2015 Dear Member

"HAPPY HOLI to ALL"

can anyone tell me how to get registered under section 620a of companies Act 1956 ( Section 406 of C.A 2013)

and along with the procedure please also tell the requirement and criteria of registration.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

10 March 2015 BELATED HAPPY HOLI.

A Nidhi to be incorporated under the Companies Act, 2013 shall be a public company and shall have a minimum paid up equity share capital of five lakh rupees. Every Company incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name. The Nidhi Company shall have only one object in its memorandum that is of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

The process of incorporation of a nidhi company is same as of incorporation of a public company limited by share.

Features of NIDHI COMPANY
1. A Nidhi shall not admit a body corporate or trust as a member.
2. Every Nidhi shall ensure that its membership is not reduced to less than two hundred members at any time.
3. The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of
Nidhi.
4.Every Nidhi shall issue equity shares of the nominal value of not less than ten rupees each. Nidhi shall not issue preference shares
5.Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees.
6. A Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last
audited financial statements.
7.A Nidhi shall provide loans only to its members.
8. Under Rule 18 of Nidhi Rules, a Nidhi shall not declare dividend exceeding twenty five per cent or
such higher amount as may be specifically approved by the Regional Director.

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