On 31st July 2019, the Companies Amendment Act, 2019 was notified. The Companies Amendment Act, 2017 is still being implemented. Earlier, the Notification S.O. 2269 (E) dated 1st July 2019 appointed 15th August 2019 as the date on which the provisions of section 81 of the said Act shall come into force. Accordingly, on this 15th August 2019, Section 406 of the Companies Act, 2013 stand replaced by another old school enactment of the law. Brief Discussion on U-turns.
Tag Archives: Nidhi
Nidhi is a special class of companies under the Companies Act 2013. Sub – Section (1) of Section 406 define Nidhi. “Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Government for regulation of such class of companies.
On 5th June 2015, Ministry of Corporate Affairs posted here a draft notification to be published in Official Gazette announcing some exemption to Nidhi Companies.
As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.
[UPDATE 19th June 2015: MCA uploaded copy of Official Gazette dated 5th June 2015, in which this Notification is published. Meaning that; These exemption came into force from that date.]
The Notification is issued in exercise of power conferred by Clauses (a) and (b) of Sub – section 462 read with Section 406 of the Companies Act, 2013. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act, 2013.
Paragraph 2 of the Notification cast a condition on the Nidhi Companies:
Rules relating to Directors [Rule 17]
The Director shall be a member of Nidhi.
The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi.
The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
Today, we will discuss loan given by Nidhi Companies.
Loans [Rule 15]
A Nidhi shall provide loans only to its members.
The loans given by a Nidhi to a member shall be subject to the following limits, namely:.
In this post we will discuss deposits accepted Nidhi companies.
Branches [Rule 10]
A Nidhi may open branches, only if it has earned net profits after tax continuously during the preceding three financial years.
A Nidhi may open up to three branches within the district.
Nidhi Companies, as defined in Section 406 of the companies Act 2013 was discussed earlier here.
“Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Government for regulation of such class of companies. [Section 406 of the Companies Act 2013]