Rule 4: Incorporation and incidental matters

Incorporation and incidental matters. —(1) A Nidhi to be incorporated under the Act shall be a public company and shall have a minimum paid up equity share capital of ten lakh rupees five lakh rupees.

Proviso

Provided that every Nidhi existing as on the date of commencement of the Nidhi Amendment Rules,2022, shall comply with this requirement within a period of eighteen months from the date of such commencement.

(2)

On and after the commencement of the Act, no Nidhi shall issue preference shares.

(3)

If preference shares had been issued by a Nidhi before the commencement of this Act, such preference shares shall be redeemed in accordance with the terms of issue of such shares.

(4)

Except as provided under the proviso to sub-rule (e) to rule 6, no Nidhi shall have any object in its Memorandum of Association other than 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.

(5)

Every Company incorporated as a “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name.

Proviso

Provided that a company shall not use the words “Nidhi Limited” in its name unless it is declared as such under sub-section (1) of section 406 of the Act.