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    Question

    Refer to the following information to answer the next 4 questions (Q9 to Q12) Nidhi Company is an NBFC (Non-Banking Financial Company). Nidhi in simple terms means a company which is formed with the object of cultivating the habit of thrift and savings. These are regulated entities and the rules and directions governing Nidhi Companies are issued from time to time. The formation of the Nidhi Company is very easy process. It requires only ____ members out of which 3 members would be the directors. The Nidhi company takes hardly 10-5 days to get registered. Also no. of the documents required for the registration are very less.

    What is the minimum paid-up share capital to incorporate a Nidhi company?

    A Rs. 1 Lakh Correct Answer Incorrect Answer
    B Rs. 2 Lakhs Correct Answer Incorrect Answer
    C Rs. 5 Lakhs Correct Answer Incorrect Answer
    D Rs. 10 Lakhs Correct Answer Incorrect Answer
    E Rs. 50 Lakhs Correct Answer Incorrect Answer

    Solution

    Conditions for incorporation [Rule 4] – a)    A Nidhi should be a ‘public company’ b)    It should have a minimum paid up equity share capital of INR 5 Lakhs . c)    On incorporation, Nidhi shall not issue preference shares. If the preference shares are already issued prior to incorporation, then, such shares should be redeemed in accordance with the terms of the issue of such shares d)    The object of Nidhi should be cultivating the habit of thrift and savings amongst the members and receiving deposits from and lending to its members for mutual benefits. e)    Nidhi shall have the last words as ‘Nidhi Limited’ as part of its name.

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