Advantages of forming a Nidhi Company Registration in India:
Easy formation: Only the MCA Portal Requirements and the Nidhi Rules,2014 need to be followed along the guidelines prescribed by the RBI.
Lower rate of credit: The loans given to the members are at a lower rate of interest than the market rate which brings greater savings to the members.
Outsider intervention avoided: The Nidhi companies are formed by, managed by, and to provide benefits for their members only. The outsider is not allowed to intervene into the working of the Nidhis.
Limited RBI Intervention: Owing to their non-dealing with the funds of any person other than their members, the regulations imposed upon the Nidhis by RBI is limited. These companies follow the Nidhi Rules, 2014 issued by the centre in respect of the activities and workings of Nidhi Companies.
Limited Capital Requirements: The Ministry of Corporate Affairs has done away with the minimum capital requirements for any type of Online Company Registration in India including Nidhis. It is only after Nidhi Rules, 2014, that mandated the infusion of INR 10 lakhs for such companies.
Rule 6 provides with the general restrictions as follows:
No Nidhi can carry on the business of chit funds, hire purchase finance, leasing finance, insurance or acquisition of securities.
No such Company Incorporated in India can issue preference shares, debentures or any other debt instrument.
Cannot accept deposits or lend to any other persons than its members.
Cannot pledge any assets as security.
A Nidhi Company Registration in India cannot carry on business without fulfilling all the above mentioned requirements, otherwise the registration of the company can be cancelled by the MCA.
CSR Activities usually undertaken by a Such Company Incorporated In India:
Constitution of the CSR Committee:
The Board of Directors of the Company shall constitute a Corporate Social Responsibility Committee of the Board consisting of 3 or more Directors, out of which at least 1 director shall be an independent director.
The CSR Committee shall –
– Formulate and recommend to the Board, a CSR policy and activities to be undertaken by the company as per Schedule VII as in other Company’s Incorporated in India.
– Review and recommend any new CSR initiatives to be taken up by the company including the selection/appointment of implementation agencies.
-Review and recommend any amendments to be made in the CSR policy of the Company.
– Recommend the amount of expenditure to be incurred on the activities; and
– Monitor the Policy of the company from time to time.
– To carry such other functions as may be delegated to it by the board relating to CSR activities of the company.
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