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Ministry of Corporate Affairs cautions investors against Nidhi companies – Financial News Live

Ministry of Corporate Affairs cautions investors against Nidhi companies

Ministry of Corporate Affairs cautions investors against Nidhi companies

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The MCA advised investors to verify the status of Nidhi companies before investing in them after it found that many such firms were not complying with the rules set for them. Several applications filed by firms for declaration as a Nidhi company have been rejected as they were found to be unfit.


“Investors are advised to verify the antecedents and status of a Nidhi company especially their declaration of their status as Nidhi Company by the central government before becoming its member and investing their hard-earned money in such firms” the MCA said in a statement.



A Nidhi company is a non-banking financial company doing the business of lending and borrowing with its members or shareholders. It is notified as a Nidhi company by the government under Section 620A of Companies Act, 1956.





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