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Q. > Please Help: Law
what is the difference between Chit fund Company & Nidhi company.
answered Jan 21, 2012 by PRIYANKA , GREATER NOIDA
nidhi company is a company registered under companies act and notifies as a nidhi company by central govt. u/s 620A of companies act It is a NBFC doing the business of lending and borrowing with its members and shareholders.
A chit fund is a kind of saving scheme practised in India. A chit fund company means a company managing , conducting or supervising As foreman , agent or any other capacity, chits as defined u/s 2 of the chit funds act 1982, according to section 2(b) of of chit funds act 1982, “ chit means a transaction whether called a chit, chit fund, chitty, kuri, or by any other name or by which a person enters into an agreement with a specified no. of persons, that everybody shall subscribe a certain sum of money ( or a certain amount of grain instead ) , by way of periodical installments over a definite period and that each such subscriber shall , in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement , be entitled to the prize amount .”
Such chit fund schemes may be conducted by organized financial institutions or may be unorganized schemes conducted between friends and relatives . There are also variations of chits where savings are done for a specific purpose .Chit fund also payed an important role in financial development of people of some states, such as Kerala. By providing easier access to credit. In kerala this is a common phenomenon practiced by a large section of society. In kerala there exists a company under the state govt., called Kerala State Financial Enterprise , the main business activity of it being the chit business. Chit funds are also sometimes misused by its promoters, and there are many examples of the founders running what is basically a fake scheme or ponzi scheme and absconding with their money.
answered Nov 05, 2012 by Anmol Goyal , Ujhani
Hmmmm
answered Dec 14, 2012 by Anmol Goyal , Ujhani
"Priyanka" has given the answer in detail, I appreciate her and no room left for further answer
Experts Panelist
Comments
Vikas
27-Apr-2011 , 06:39:17 amA Chit fund is a kind of savings scheme practiced in India. A Chit fund company means a company managing, conducting or supervising, as foremen, agent or in any other capacity, chits as defined in Section 2 of the Chit Funds Act, 1982. According to Section 2(b) of the Chit Fund Act, 1982, "Chit means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount". Such chit fund schemes may be conducted by organised financial institutions or may be unorganised schemes conducted between friends or relatives. There are also variations of chits where the savings are done for a specific purpose. Chit funds also played an important role in the financial development of people of south Indian state of Kerala, by providing easier access to credit. In kerala chitty (chit fund) is a common phenomenon practiced by all sections of the society. In Kerala, there exists a company under the State Government, called Kerala State Financial Enterprise, the main business activity of it being the chitty business. Chit Funds are also misused by its promoters and there are many instances of the founders running what is basically a Ponzi scheme and absconding with their money. Nidhi company is a company registered under Companies Act and notified as a nidhi company by Central Government under Section 620-A of Companies Act. It is a non-banking finance company doing the business of lending and borrowing with its members or shareholders.
CA. SANAT PYNE
02-May-2011 , 07:37:20 amNidhi company is a company registered under Companies Act and notified as a nidhi company by Central Government under Section 620-A of Companies Act. It is a non-banking finance company doing the business of lending and borrowing with its members or shareholders. A Chit fund is a kind of savings scheme practiced in India. A Chit fund company means a company managing, conducting or supervising, as foremen, agent or in any other capacity, chits as defined in Section 2 of the Chit Funds Act, 1982. According to Section 2(b) of the Chit Fund Act, 1982, "Chit means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount". Such chit fund schemes may be conducted by organised financial institutions or may be unorganised schemes conducted between friends or relatives. There are also variations of chits where the savings are done for a specific purpose. Chit funds also played an important role in the financial development of people of south Indian state of Kerala, by providing easier access to credit. In kerala chitty (chit fund) is a common phenomenon practiced by all sections of the society. In Kerala, there exists a company under the State Government, called Kerala State Financial Enterprise, the main business activity of it being the chitty business. Chit Funds are also misused by its promoters and there are many instances of the founders running what is basically a Ponzi scheme and absconding with their money.