Power of Central Government or Company Law Board to accord Approval, etc., subject to conditions and to prescribe fees on applications - Declaration of Nidhi companies by Central Government subject to certain conditions - GSR 773(E), - Companies Law

NOTIFICATION NO. GSR 773(E), DATED 4-12-1995, ISSUED BY THE DEPARTMENT OF COMPANY AFFAIRS, MINISTRY OF LAW, JUSTICE AND COMPANY AFFAIRS Subject:- Power of Central Government or Company Law Board to accord Approval, etc., subject to conditions and to prescribe fees on applications - Declaration of Nidhi companies by Central Government subject to certain conditions GSR 773(E).- In exercise of the powers conferred by sub-section (1) of section 637A of the Companies Act, 1956 (1 of 1956), the Central Government hereby directs that (a) no company declared as a Nidhi or Mutual Benefit Society under section 620A of the said Act, before the date of this notification (hereinafter referred to as such Nidhi or Mutual Benefit Society) shall, after the publication of this notification, (i) carry on the business of chit fund, hire purchase, insurance or any business in shares or debentures, (ii) open any new branch in any place outside the local limits of the District wherein its Registered Office is located, (iii) open any new current account with its members, (iv) admit as member any body corporate or trust, (v) issue any new equity shares of nominal value exceeding rupees ten, (vi) issue any further preference shares, (vii) issue any new shares to any select group of persons other than bona fide deposits, (viii) acquire control of any other company by way of acquisition of shares, or by composition of the Board of Directors of such company, (ix) allow use of its name by any other body corporate whose main object is to earn profit by borrowing and lending, (x) enter into any financial dealing with any person other than its members, (xi) take further deposits from or lend further money to any body corporate, (xii) carry on any business other than the business of borrowing or lending in its own name, (xiii) enter into any new partnership arrangement in its borrowing or lending activities, (xiv) give any new loans or advances without the security in the form of fixed deposits or recurring deposits with the said Nidhi or Mutual Benefit Society or gold, silver, jewellery or immovable property; (b) every such Nidhi or Mutual Benefit Society shall, after the publication of this notification (i) ensure that its membership is not reduced to less than one thousand members at any time, (ii) obtain a certificate every year from the statutory auditors certifying that it has complied with the directions specified in this notification and has maintained its books of account according to recognised principles of accounting. 2. The directions specified in sub-clauses (i) to (xiv) of clause (a) and sub-clauses (i) and (ii) of clause (b) of this notification shall, as far as may be apply to every company declared as a Nidhi or Mutual Benefit Society under section 620A of the said Act on or after the publication of this notification.