With the implementation of new rules for operations of Nidhi Company, into effect from April 01, 2014, what will be fate of the public deposit schemes? How these Rules, 2014 are going to impact the Indian Financial Sector, especially Nidhi Companies in India? Nidhi Companies are created mainly for cultivating the habit of thrift and savings amongst its members. The amount of business conducted by Nidhi Companies is not as big as commercial banks or deposit taking Non-Banking Finance Companies. Nidhi Companies are highly localized and mostly single office institutions. They are also referred to as mutual benefit societies, because they accept deposits and give loans to only their own members; and membership is limited to individuals.

1. EquiCorp Associates
Advocates & Solicitors
www.equicorplegal.com

2. What is Nidhi Company?
“Nidhi is a company formed with the exclusive object of cultivating the
habit of thrift, savings and functioning for the mutual benefit of
members by receiving deposits only from individuals enrolled as
members and by lending only to individuals, also enrolled as
members”
-Section 406, Companies Act, 2013 & Companies Rules 2014
 Nidhi Company are registered or formed only for the benefit for its
members only, an outsider i.e. who is not the member of the Nidhi
Company is not allowed to deposit any money or doing any kind of
business with the concerned Nidhi Company. In this presentation we will
analyze the impact of Nidhi Companies Rules 2014 on the registration of
Nidhi Company.
“Nidhi is a company formed with the exclusive object of cultivating the
habit of thrift, savings and functioning for the mutual benefit of
members by receiving deposits only from individuals enrolled as
members and by lending only to individuals, also enrolled as
members”
-Section 406, Companies Act, 2013 & Companies Rules 2014
 Nidhi Company are registered or formed only for the benefit for its
members only, an outsider i.e. who is not the member of the Nidhi
Company is not allowed to deposit any money or doing any kind of
business with the concerned Nidhi Company. In this presentation we will
analyze the impact of Nidhi Companies Rules 2014 on the registration of
Nidhi Company.
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3. Incorporation of Nidhi
Company
 A Nidhi Company to be incorporated under the Companies Act, 2013
(“Act”) shall be a public company and with a minimum paid up equity
share capital of five lakh rupees;
 On and after the commencement of Companies Act, 2013, no Nidhi
Company shall issue preference shares;
 Except as provided under the provisions of Nidhi Companies Rules
2014, no Nidhi Company 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;
 Every company incorporated as Nidhi shall have the last words “Nidhi
Limited” as part of its name.
 A Nidhi Company to be incorporated under the Companies Act, 2013
(“Act”) shall be a public company and with a minimum paid up equity
share capital of five lakh rupees;
 On and after the commencement of Companies Act, 2013, no Nidhi
Company shall issue preference shares;
 Except as provided under the provisions of Nidhi Companies Rules
2014, no Nidhi Company 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;
 Every company incorporated as Nidhi shall have the last words “Nidhi
Limited” as part of its name.
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4. Structure of Nidhi Company
 Within a period of one year from the commencement of the Nidhi
Companies Rules 2014, every Nidhi Company shall ensure that it has:
 Not less than two hundred members;
 Net Owned funds of ten lakhs or more;
 Unencumbered term deposits of not less than 10% of the outstanding
deposits;
 Ratio of Net Owned Funds to deposits of not more than 1:20
 A Nidhi Company shall not admit a body corporate or trust as member
 A minor shall not be admitted as a member of Nidhi Company;
 Except as otherwise permitted under the Nidhi Company Rules, 2014,
every Nidhi Company shall ensure that its membership is not reduce to
less than two hundred members at any time.
 Within a period of one year from the commencement of the Nidhi
Companies Rules 2014, every Nidhi Company shall ensure that it has:
 Not less than two hundred members;
 Net Owned funds of ten lakhs or more;
 Unencumbered term deposits of not less than 10% of the outstanding
deposits;
 Ratio of Net Owned Funds to deposits of not more than 1:20
 A Nidhi Company shall not admit a body corporate or trust as member
 A minor shall not be admitted as a member of Nidhi Company;
 Except as otherwise permitted under the Nidhi Company Rules, 2014,
every Nidhi Company shall ensure that its membership is not reduce to
less than two hundred members at any time.
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5. Branches
 Any kind of public deposit business runs on its branch offices. A Nidhi
Company may open branches, only if it has earned net profits after tax
continuously during the preceding three financial years. A Nidhi
Company may open up to three branches within the district;
 No Nidhi Company shall open branches or collection centres or offices
or deposit centres or by whatever name called outside the State where its
registered office is situated;
 A Nidhi Company shall not close any of its branch unless it :-
 Publishes an advertisement in a newspaper in vernacular language in the
place where it carries on business at least thirty days prior to such
closure, informing the public about such closure;
 Inform the Registrar within the thirty days of such closure
 Any kind of public deposit business runs on its branch offices. A Nidhi
Company may open branches, only if it has earned net profits after tax
continuously during the preceding three financial years. A Nidhi
Company may open up to three branches within the district;
 No Nidhi Company shall open branches or collection centres or offices
or deposit centres or by whatever name called outside the State where its
registered office is situated;
 A Nidhi Company shall not close any of its branch unless it :-
 Publishes an advertisement in a newspaper in vernacular language in the
place where it carries on business at least thirty days prior to such
closure, informing the public about such closure;
 Inform the Registrar within the thirty days of such closure
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6. Deposits
 The fixed deposits shall be accepted for a minimum period of six months
and a maximum period of sixty months;
 Recurring deposits shall be accepted for a minimum period of twelve
months and a maximum period of sixty months;
 The maximum balance in a savings deposit account at any given time
qualifying for interest shall not exceed one lakh rupees at any point of time
and the rate of interest shall not exceed 2% above the rate of interest
payable on savings bank account by nationalized banks;
 A Nidhi Company may offer interest on fixed and recurring deposits at a
rate not exceeding the maximum rate of interest prescribed by the Reserve
Bank of India which the Non-Banking Financial Companies can pay on
their public deposits.
 A Nidhi Company shall not accept deposits exceeding twenty times of its
Net Owned Funds (NoF) as per its last audited financial statements
 The fixed deposits shall be accepted for a minimum period of six months
and a maximum period of sixty months;
 Recurring deposits shall be accepted for a minimum period of twelve
months and a maximum period of sixty months;
 The maximum balance in a savings deposit account at any given time
qualifying for interest shall not exceed one lakh rupees at any point of time
and the rate of interest shall not exceed 2% above the rate of interest
payable on savings bank account by nationalized banks;
 A Nidhi Company may offer interest on fixed and recurring deposits at a
rate not exceeding the maximum rate of interest prescribed by the Reserve
Bank of India which the Non-Banking Financial Companies can pay on
their public deposits.
 A Nidhi Company shall not accept deposits exceeding twenty times of its
Net Owned Funds (NoF) as per its last audited financial statements
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7. Loans
i. A Nidhi Company shall provide loans only to its
members;
ii. A Nidhi Company shall give loans to its members
only against the following securities namely:
 Gold, silver and jewellery
 Immovable property;
 Fixed deposit receipts, National Savings Certificates, other
Government Securities and insurance policies
i. A Nidhi Company shall provide loans only to its
members;
ii. A Nidhi Company shall give loans to its members
only against the following securities namely:
 Gold, silver and jewellery
 Immovable property;
 Fixed deposit receipts, National Savings Certificates, other
Government Securities and insurance policies
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8. Dividend
 A Nidhi Company shall not declare dividend exceeding
25% or such higher amount as may be specifically approved
by the Regional Director for reasons to be recorded in
writing and further subject to the following conditions,
namely:-
i. An equal amount is transferred to general reserve;
ii. There has been no default in repayment of matured deposits and
interest and
iii. It has complied with all rules as applicable to Nidhi Companies
For further details on Registration of Nidhi Companies, please click on the link
below:
http://www.equicorplegal.com/Pdfs/ECA%20Nidhi%20Company%20Registrati
on.pdf
 A Nidhi Company shall not declare dividend exceeding
25% or such higher amount as may be specifically approved
by the Regional Director for reasons to be recorded in
writing and further subject to the following conditions,
namely:-
i. An equal amount is transferred to general reserve;
ii. There has been no default in repayment of matured deposits and
interest and
iii. It has complied with all rules as applicable to Nidhi Companies
For further details on Registration of Nidhi Companies, please click on the link
below:
http://www.equicorplegal.com/Pdfs/ECA%20Nidhi%20Company%20Registrati
on.pdf
www.equicorplegal.com

9. www.equicorplegal.com

10. Consult the Experts
Complete assistance for making the necessary filings,
applications etc. for obtaining MCA’s approval to operate
as Nidhi Company.
Informal discussion with contact personnel within MCA
so as to perfect the application before the same is
submitted.
Follow up support at various points in time during and
after the pendency of the application so as to ensure that
any additional documents/records requested by MCA is
submitted in a systematic and timely manner.
 Updating Company on a regular basis as to the status of
the pending application.
Complete assistance for making the necessary filings,
applications etc. for obtaining MCA’s approval to operate
as Nidhi Company.
Informal discussion with contact personnel within MCA
so as to perfect the application before the same is
submitted.
Follow up support at various points in time during and
after the pendency of the application so as to ensure that
any additional documents/records requested by MCA is
submitted in a systematic and timely manner.
 Updating Company on a regular basis as to the status of
the pending application.
www.equicorplegal.com

11. About Us
 Equi Corp Associates (ECA) is a mission driven, start-up law practice based in New
Delhi, India and founded in 2012 for providing affordable access to legal counsel
benefitting start-ups, small and growing businesses, social business enterprises, impact
investors and non-profit organizations. Our boutique service offerings are primarily at the
intersection of start-up, sustainable development, social enterprise and investment
sectors, designed to help clients wade through laws that were not originally designed
with them in mind.
 The basic idea behind starting ECA was to be a part of India’s growth by reaching out to
novel start-ups and established businesses, and helps them adapt best global
practices/technologies in local conditions and in advising them about legal aspects
involved in modern markets in order to keep our clients in pace with the dynamic
competitive environment.
 ECA is instrumental in advising various social enterprises and start ups in setting up
their business in India.
 ECA not only having some of the best legal minds, but the best business minds too:
lawyers are intimately familiar with the business environment, and know the emerging
risks and opportunities of their industries and practice groups.
 Equi Corp Associates (ECA) is a mission driven, start-up law practice based in New
Delhi, India and founded in 2012 for providing affordable access to legal counsel
benefitting start-ups, small and growing businesses, social business enterprises, impact
investors and non-profit organizations. Our boutique service offerings are primarily at the
intersection of start-up, sustainable development, social enterprise and investment
sectors, designed to help clients wade through laws that were not originally designed
with them in mind.
 The basic idea behind starting ECA was to be a part of India’s growth by reaching out to
novel start-ups and established businesses, and helps them adapt best global
practices/technologies in local conditions and in advising them about legal aspects
involved in modern markets in order to keep our clients in pace with the dynamic
competitive environment.
 ECA is instrumental in advising various social enterprises and start ups in setting up
their business in India.
 ECA not only having some of the best legal minds, but the best business minds too:
lawyers are intimately familiar with the business environment, and know the emerging
risks and opportunities of their industries and practice groups.
www.equicorplegal.com

12. ECA’s Network Presence
Delhi/NCR
Dehradun
Jaipur Allahabad Guwahati
Mumbai
Bangalore
Our Associated
Office
Kolkata
Hyderabad
Chennai
ECA
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13. WHY Equi Corp Associates??
• ECA is a multispecialty law firm, with its founding partners having a vast
experience for providing legal services to a variety of domestic & international
clients, corporations, financial entities & government agencies.
• Our respected clients - from individuals to small businesses to Fortune 500
companies -- turn to us for trusted legal counsel.
• ECA is equipped with required professional setup of Qualified, Experienced and
Knowledgeable members.
• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurs
with legal services that enables them to compete with best in world in the
modern economy characterised by technology based, venture capital funded,
futuristic businesses governed by complex and ever evolving legal and
statutory framework.
• ECA is also effective in providing match making partner/locating strategic
alliance, follow up and representation with Government of India or any other
incidental work related to investment or legal guidance in India.
• ECA is a multispecialty law firm, with its founding partners having a vast
experience for providing legal services to a variety of domestic & international
clients, corporations, financial entities & government agencies.
• Our respected clients - from individuals to small businesses to Fortune 500
companies -- turn to us for trusted legal counsel.
• ECA is equipped with required professional setup of Qualified, Experienced and
Knowledgeable members.
• We advise and assist NRI’s/PIO’s, Foreign Investors and Indian entrepreneurs
with legal services that enables them to compete with best in world in the
modern economy characterised by technology based, venture capital funded,
futuristic businesses governed by complex and ever evolving legal and
statutory framework.
• ECA is also effective in providing match making partner/locating strategic
alliance, follow up and representation with Government of India or any other
incidental work related to investment or legal guidance in India.
www.equicorplegal.com

14. The Verticals
• Corporate & Commercial
• Banking & Finance
• Real Estate
• Infrastructure & Project Finance
• Employment & Labour
• Media, Sports & Entertainment
• Litigation & Arbitration
• Tax & Consulting
• Intellectual Property
• Corporate & Commercial
• Banking & Finance
• Real Estate
• Infrastructure & Project Finance
• Employment & Labour
• Media, Sports & Entertainment
• Litigation & Arbitration
• Tax & Consulting
• Intellectual Property
The Firm specializes in verticals such
as IT, ITES, Bio-tech, Power, Water,
Retail Trade, Education, Mining,
Aviation, Tourism, Insurance,
Telecom, Media & Entertainment
www.equicorplegal.com

15. Corporate & Commercial Services
 Foreign Investment in India / Abroad
 Drafting and vetting of Joint Venture Agreements, Corporate
Agreements, Management Agreement, Cross border transaction
agreements etc.,
 Compliance Audit, Due Diligence & Transaction Advisory;
 Formation & structuring of business entities;
 Mergers & Acquisitions & Private Equity;
 Competition & Fair Trade Practice;
 Corporate Governance & Restructure;
 Venture Fund, Mutual Fund, RE Trust Funds.
 Foreign Investment in India / Abroad
 Drafting and vetting of Joint Venture Agreements, Corporate
Agreements, Management Agreement, Cross border transaction
agreements etc.,
 Compliance Audit, Due Diligence & Transaction Advisory;
 Formation & structuring of business entities;
 Mergers & Acquisitions & Private Equity;
 Competition & Fair Trade Practice;
 Corporate Governance & Restructure;
 Venture Fund, Mutual Fund, RE Trust Funds.
www.equicorplegal.com

16. Banking & Finance Services
 Credit Co-operative & Financial Institutions;
 Quasi Banks & Nidhi Companies;
 Urban Credit Co-operative Banks;
 Micro Finance Institutions;
 Banks & NBFCs and other Financial Intermediaries;
 Alternative Investment Funds;
 Real Estate Finance including Collective investment
Schemes;
 Structured & Asset Finance;
 National Pension Scheme
 Securitization;
 Debt recovery
 Credit Co-operative & Financial Institutions;
 Quasi Banks & Nidhi Companies;
 Urban Credit Co-operative Banks;
 Micro Finance Institutions;
 Banks & NBFCs and other Financial Intermediaries;
 Alternative Investment Funds;
 Real Estate Finance including Collective investment
Schemes;
 Structured & Asset Finance;
 National Pension Scheme
 Securitization;
 Debt recovery
www.equicorplegal.com

17. Real Estate Services
 Title Search & Property transactions
 Joint ventures in Real Estate
 Build to suit campuses
 Development of Technology Parks,
Integrated Townships, Warehouse &
Logistics Parks, SEZ, Hotels,
Multiplexes Entertainment Centres,
Slum Developments, Rehabilitation
Projects etc.
 Sale deeds
 Lease, Leave and License Agreements
 Gift deeds
 Mortgage & Finance Agreements
 Title Search & Property transactions
 Joint ventures in Real Estate
 Build to suit campuses
 Development of Technology Parks,
Integrated Townships, Warehouse &
Logistics Parks, SEZ, Hotels,
Multiplexes Entertainment Centres,
Slum Developments, Rehabilitation
Projects etc.
 Sale deeds
 Lease, Leave and License Agreements
 Gift deeds
 Mortgage & Finance Agreements
www.equicorplegal.com

18. Infrastructure & Project Finance Services
 Transaction Advisory: Energy, Oil and Gas, Highway, Road,
Airport, Ports, Water & Sanitation and Telecommunications
 Drafting, negotiations and review of financing & security
documents
 Tender Documents, Bidding process, PPP, Concession
Contracts, PPA, EPC Contracts
 Government Approvals & Liaisoning with statutory
authorities
 Structuring, negotiation & documentations of projects
 Transaction Advisory: Energy, Oil and Gas, Highway, Road,
Airport, Ports, Water & Sanitation and Telecommunications
 Drafting, negotiations and review of financing & security
documents
 Tender Documents, Bidding process, PPP, Concession
Contracts, PPA, EPC Contracts
 Government Approvals & Liaisoning with statutory
authorities
 Structuring, negotiation & documentations of projects
www.equicorplegal.com

19. Employment & Labour Services
 Appointment/Offer letters, Termination practices
 Employee Stock Option Plan
 Employee Handbook
 Labour Compliance
 Service Bonds
 Standing Orders & Service Rules
 Migration & Emigration of Employees
 Country specific employment relation
 Grievance Settlement Procedures
 Appointment/Offer letters, Termination practices
 Employee Stock Option Plan
 Employee Handbook
 Labour Compliance
 Service Bonds
 Standing Orders & Service Rules
 Migration & Emigration of Employees
 Country specific employment relation
 Grievance Settlement Procedures
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20. Media, Sports & Entertainment Services
 Television & News Channel;
 Media & Production Houses;
 Endorsements, Distribution, Event Sponsorship,
Venue, Marketing Rights, Merchandise Agreements;
 FM Radio Channels;
 Publishing House;
 Studios;
 Sports Club
 Television & News Channel;
 Media & Production Houses;
 Endorsements, Distribution, Event Sponsorship,
Venue, Marketing Rights, Merchandise Agreements;
 FM Radio Channels;
 Publishing House;
 Studios;
 Sports Club
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21. Litigation & Arbitration Services
 Commercial Litigation
 Recovery/Enforcement
 Civil Litigation
 Medical Negligence
 IP Litigation
 Arbitration
 White Collar Crimes
 Economic Offences
 Bankruptcy/Insolvency
 Criminal Litigation
 Commercial Litigation
 Recovery/Enforcement
 Civil Litigation
 Medical Negligence
 IP Litigation
 Arbitration
 White Collar Crimes
 Economic Offences
 Bankruptcy/Insolvency
 Criminal Litigation
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22. Tax & Consulting Services
 Company Secretarial Services:
- Incorporation of companies/branches/liaison
office/representative office
- Maintenance of Secretarial Record and recurring
secretarial services
- Registration with Statutory Authorities including
Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.
 Accounting & Payroll Services
 Tax and Regulatory Services
 Advising on Customs & Excise matters
 Immigration Services
 Company Secretarial Services:
- Incorporation of companies/branches/liaison
office/representative office
- Maintenance of Secretarial Record and recurring
secretarial services
- Registration with Statutory Authorities including
Income Tax,RBI,EoU, STPI, Custom Bonding, Central Excise etc.
 Accounting & Payroll Services
 Tax and Regulatory Services
 Advising on Customs & Excise matters
 Immigration Services
www.equicorplegal.com

23. Intellectual Property Services
 IP Portfolio Management
 IP Auditing
 IP Strategic Alliances
 Collaboration
 Licensing
 Technology Transfer Agreements
 Search, drafting, filing and prosecution in :
 Patents
 Trademarks
 Copyrights
 Industrial Designs
 IP Portfolio Management
 IP Auditing
 IP Strategic Alliances
 Collaboration
 Licensing
 Technology Transfer Agreements
 Search, drafting, filing and prosecution in :
 Patents
 Trademarks
 Copyrights
 Industrial Designs
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24. Our Commitment
Value
 One stop legal boutique where assignments carried out at a fraction of
the cost of clients staff
 Reduce client staff management time and overhead costs, and increase
clients profitability
 Enable clients staff to concentrate on more interesting and value-added
work
Service
 Robust management and procedures to ensure delivery on time and on
budget
 Dedicated one-to-one communication with client, to ensure every
project is right first time
 Full service delivery is achieved by synergies of subject matter
expertise of our in-house Lawyers, Chartered Accountants, Company
Secretaries and Tax Consultants
Quality
 Two-level file review and signoff by expert Lawyers, even for the
smallest assignment
Value
 One stop legal boutique where assignments carried out at a fraction of
the cost of clients staff
 Reduce client staff management time and overhead costs, and increase
clients profitability
 Enable clients staff to concentrate on more interesting and value-added
work
Service
 Robust management and procedures to ensure delivery on time and on
budget
 Dedicated one-to-one communication with client, to ensure every
project is right first time
 Full service delivery is achieved by synergies of subject matter
expertise of our in-house Lawyers, Chartered Accountants, Company
Secretaries and Tax Consultants
Quality
 Two-level file review and signoff by expert Lawyers, even for the
smallest assignment
www.equicorplegal.com

25. Our Core Strengths
 Dedicated team of legal professionals with strong deal exposure and
knowledge of regulations of various sectors.
 Proactive and structured approach
 Well defined processes
 Well defined Project methodology tailored to suit the needs of clients for
service delivery
 Talented team with experience of working with some of the largest
companies in India exposure to leading cross border transactions in India
 Experience & proven capabilities to handle Diversified Multi-national Clients
i.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & Gas
Sector, Retail Trading, Hospitality, Restaurant and related sectors.
 Competitive advantage of costing by virtue of expertise and experienced
resources.
 Dedicated team of legal professionals with strong deal exposure and
knowledge of regulations of various sectors.
 Proactive and structured approach
 Well defined processes
 Well defined Project methodology tailored to suit the needs of clients for
service delivery
 Talented team with experience of working with some of the largest
companies in India exposure to leading cross border transactions in India
 Experience & proven capabilities to handle Diversified Multi-national Clients
i.e. Information Technology, Energy, Manufacturing, Consultancy, Oil & Gas
Sector, Retail Trading, Hospitality, Restaurant and related sectors.
 Competitive advantage of costing by virtue of expertise and experienced
resources.
www.equicorplegal.com

26. For further information
Contact :
Aashish Srivastava
Partner
Equi Corp Associates
Advocates & Solicitors
W-86, Classic House, GK-II, New Delhi
T: +91 11 40573261
Mobile : +919958709189
E-mail :admin@equicorplegal.com
www.equicorplegal.com