Ramesh wishes to form a Nidhi Company with a minimum paid-up equity share capital of ₹ 12 lakh. Ramesh is seeking your guidance regarding the general limitations and prohibitions put in place for Nidhi Companies.

General Restrictions or Prohibitions In terms of Rule 6 of the Nidhis Rules, 2014, Nidhi shall not- carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by anybody corporate; issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever; open a current account with its members; acquire or purchase securities of any other company or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management; carry on any business other than the business of borrowing or lending in its own name. Nidhis which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year; accept deposits from or lend to any person, other than its members; pledge any of the assets lodged by its members as security; take deposits from or lend money to anybody corporate; enter into any partnership arrangement in its borrowing or lending activities; issue or cause to be issued any advertisement in any form for soliciting deposit; It may be noted that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words "for private circulation to members only" shall not be considered to be an advertisement for soliciting deposits; pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or for granting loans; raise loans from banks or financial institutions or any other source for the purpose of advancing loans to members of Nidhi.