Restrictions Upon a Nidhi Company

• Restrictions Upon a Nidhi Company
• A Nidhi company cannot deal in the following –
• Chit fund business

• Hire purchase finance

• Acquisition/insurance of securities issued by any corporate

• Engaging as an NBFC in the business of advances or loans

• Leasing finance

• Acquisition of stocks/shares /bonds/securities/debentures issued by any local authority /Govt./marketable securities

Restrictions applicable to a Nidhi Company Registration

• In India, the Restrictions applicable to Nidhi Companies in terms of their activities are as follows:

• Chit funds,

• Insurance,

• Leasing finance,

• Advertise themselves to invite deposits,

• Hire-Purchase finances,

• Lotteries,

• Sell, Mortgage or Pledge the assets kept with it as collateral security for a loan,

• Getting into Partnerships in order to carry out lending and borrowing activities,

• Accepting deposits or lending funds to any other person than its own shareholders,

• Issuance of preference shares, debentures or any other type of debt instruments,

• Issue of Equity Shares of the nominal value at over Rs. 10/- each,

• Offer its deposit holders equity shares that, too, more ten shares or shares of the worth of more than Rs. 100/-,