Fund companies are not fully following the rules.
The Ministry of Corporate Affairs asked investors to get complete information about them before investing in fund companies. The ministry issued this statement after such companies did not follow the rules.
- February 25, 2021, 8:49 PM IST
Fund companies registered under the Companies Act are Non-Banking Units which undertake lending and borrowing with their members. The Ministry of Corporate Affairs said, “Investors are advised to check their status / back-and-forth history before investing in or becoming a member of the fund company.” Amended Companies Act, 2013 and Fund Rules, 2014 Under this, companies are required to declare themselves fund company by applying to the Ministry of Corporate Affairs through NDH-4 form. The ministry said, “After looking into the applications, it was found that these companies are not following the rules fully”. According to the ministry, as a result, many applications in this context of companies have been rejected.
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