Ragavi and her six more relatives & friends want to incorporate a Nidhi Company. They seek your advice on the following issues with respect to the formation of company: (iv) Whether Nidhi is allowed to carry on busin

CS Executive · Setting up of Business Entities and Closure · PYQS · June 2019
Ragavi and her six more relatives & friends want to incorporate a Nidhi Company. They seek your advice on the following issues with respect to the formation of company: (iv) Whether Nidhi is allowed to carry on business other than the business of borrowing or lending in its own name ? As a practising Company Secretary, advise with reference to the provisions of the Companies Act, 2013.

Answer & Explanation:

As per rule 6 of the Nidhi Rules, 2014, no Nidhi Company shall carry on any business other than the business of borrowing or lending in its own name.

Topics: Companies Act, 2013; Nidhi Rules, 2014

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