Introduction

Since Nidhi Companies are mutual benefit societies, their membership rules are strictly defined. Rule 8 of the Nidhi Rules, 2014 explains who can become a member, restrictions on membership, and the rights of members while holding deposits or loans.

Who Can Be a Member?

A Nidhi can only admit individuals as members. This means that companies, body corporates, or trusts cannot be members of a Nidhi. The intention is to keep Nidhi Companies limited to individual participation and not allow large institutions to dominate.

Minimum Number of Members

Every Nidhi must always maintain a membership of at least 200 members. This requirement ensures that the company has a broad base of members and does not function as a closed group. If membership falls below 200, the company will be non-compliant with the rules.

Minors as Members

A minor cannot directly become a member of a Nidhi. However, deposits can still be made in the name of a minor, provided the deposit is made by the minor’s parent or legal guardian, who is already a member of the Nidhi.

Restrictions on Transfer of Shares

If a member has taken a loan or placed a deposit with the Nidhi, he cannot transfer more than 50% of his shareholding during the period of that loan or deposit.

• The rule ensures that members maintain adequate shareholding while enjoying the benefits of being part of the company.
• However, the member must always retain the minimum number of shares required under Rule 7 (10 shares or ₹100 worth of shares, or at least 1 share of ₹10 for savings/recurring deposit holders).

Conclusion

Rule 8 keeps the membership of Nidhi Companies simple and focused on individuals. It excludes corporate bodies and trusts, requires a minimum of 200 members, prevents minors from direct membership, and places restrictions on share transfers during the period of loans or deposits. These rules collectively ensure that Nidhis remain true to their purpose as small-scale, member-driven mutual benefit institutions.

Frequently Asked Questions (FAQs) on Membership in Nidhi Companies

Q1. Who can become a member of a Nidhi Company?
Only individuals can become members of a Nidhi Company. Body corporates, companies, and trusts are not allowed as members.

Q2. What is the minimum number of members required in a Nidhi Company?
Every Nidhi Company must have at least 200 members within one year of incorporation and must maintain this number at all times.

Q3. Can a minor be a member of a Nidhi Company?
No. A minor cannot be admitted as a member. However, deposits can be accepted in the name of a minor if made by the natural or legal guardian who is already a member of the Nidhi.

Q4. Can a member transfer all his shares if he has taken a loan from the Nidhi?
No. A member cannot transfer more than 50% of his shareholding during the period of a loan or deposit.

Q5. What happens if a member wants to transfer shares but has a loan outstanding?
The member must always retain the minimum shareholding required under Rule 7 (generally 10 shares or shares worth ₹100, or 1 share of ₹10 for savings/recurring deposit account holders).

Q6. Why does the law require a minimum of 200 members in a Nidhi Company?
This requirement ensures that a Nidhi operates as a genuine mutual benefit society serving a broad base of members, and not as a private group controlled by only a few individuals.