Lawgist13Aggregate amount of chits
(1) No foreman, other than a firm or other association of individuals or a company or co-operative society, shall commence or conduct chits, the aggregate 1[gross chit amount] of which at any time exceeds 2[rupees three lakh].
(2) Where the foreman is a firm or other association of individuals, the aggregate 1[gross chit amount] of the chits conducted by the firm or other association shall not at any time exceed,--
(a) where the number of partners of the firm or the individuals constituting the association is not less than four, a sum of rupees 3[rupees eighteen lakhs];
(b) in any other case, a sum calculated on the basis of 2[rupees three lakh] with respect to each such partner or individual.
(3) Where the foreman is a company or co-operative society, the aggregate 1[gross chit amount] of the chits conducted by it shall not at any time exceed ten times the net owned funds of the company or the co-operative society, as the case may be.
Explanation.-- For the purposes of this sub-section, "net owned funds" shall mean the aggregate of the paid-up capital and free reserves as disclosed in the last audited balance sheet of the company or cooperative society, as reduced by the amount of accumulated balance of loss, deferred revenue, expenditure and other intangible assets, if any, as disclosed in the said balance-sheet.
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1. Subs. by Act 41 of 2019, s. 3, for "chit amount" (w.e.f. 1-1-2020).
2. Subs. by s. 5, ibid., "rupees one lakh" (w.e.f. 01-10-2020).
3. Subs. by s. 5, ibid., for, "rupees six lakhs" (w.e.f. 01-01-2020).
- 4 Prohibition of chits not sanctioned or registered under the Act
- 5 Prohibition of invitation for subscriptions except under certain conditions
- 6 Form of chit agreement
- 7 Filing of chit agreement
- 8 Minimum capital requirements for the commencement, etc., of a chit, and creation of a reserve fund, by a company
- 9 Commencement of chit
- 10 Copies of chit agreement to be given to subscribers
- 11 Use of words "chit", "chit fund", "chitty", "kuri", "fraternity fund", or "Rotating Savings and Credit Institution"
- 12 Prohibition of transacting business other than chit business by a company
- 13 Aggregate amount of chits
- 14 Utilisation of funds
- 15 Alteration of chit agreement
- 16 Date, time and place of conducting chits
- 17 Minutes of proceedings
- 18 Copies of minutes to be filed with Registrar
- 19 Restriction on opening of new place of business
