No rules have been laid down barring a salaried person to become a director of a Nidhi Company.

No, a Nidhi Company can be opened at a residential address or a rented one. You do not need a market place for a registered office address. You just need: 1. Rent agreement along with the latest rent receipt (if the place is rented). 2. NOC from the Owner. 3. House tax receipts (if the premises are owned) 4. Electricity bill.

• A Nidhi Company is prohibited to engage in “chit funds, insurance, leasing finance, or acquisition of securities” issued by any Body Corporate. • A Nidhi Company cannot issue preference shares, debentures, or any other such instrument. • It cannot accept deposits nor lend money to anyone, other than it’s members. • These companies cannot pay any incentive for mobilizing deposits.

DIN or "Director Identification Number" is given to an existing Director or potential Director of any Company which is incorporated or is to be incorporated. It is a Unique Identification Number, issued by the MCA.

DSC or Digital Signature Certificate means signing the documents electronically/digitally by an authorized person. It is used for signing the electronic company-related forms and statements. It cannot be used in physical documents.

NOF or Net Owned Fund = Paid-up share capital + Free Reserves – Accumulated losses, deferred revenue Expenditure, and other intangible assets.

1. It cannot accept deposits over 20 times of it’s NOF. 2. The time duration for “Fixed Deposits” is a minimum of 6 months to a maximum of 60 months. 3. For Recurring Deposits, it is a minimum of 12 months to a maximum of 60 months. 4. A Nidhi Company can invest and keep investing, in an unencumbered term deposit with a scheduled commercial bank (other than a co-operative bank or a regional rural bank), or in post office deposits, in it’s own name, and the amount must not be less than 10% of the deposits outstanding at the close of business on the last working day of the second preceding month. In some emergency, the limit of 10% can be reduced only after seeking approval from the Regional Director.

A Nidhi company is registered as a Public Limited Company. Hence, the requirements for incorporation of a Nidhi company covers a minimum of three Directors and Seven Shareholders. However, the MOA of a Nidhi company must state that the primary objective of the proposed company is to nurture and promote a habit of thriftiness and savings among it’s members, and accept deposits from or lend loans only to it’s members, for their mutual benefits.

Yes, because the Government of India/Ministry of Corporate Affairs/RBI has framed the laws to ensure the security and safety of deposits, and Nidhi companies must strictly abide by the rules and regulations framed by the Central Government.

Only shareholders/Members of the Nidhi Company, who have a membership ID, can invest in the scheme. To be a member, you must be 18-years or above and must be a citizen of India.

A Nidhi Company can open 3 branches in it’s district, only if it has earned profits after tax consistently during the preceding three financial years. For any additional branch, it will first have to apply for approval from the Regional Director.

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