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Government New Norms For Nidhi Companies You Must Be Aware Of

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Nidhi Companies

The Ministry of Corporate Affairs (MCA) as per the notification dated 14th February 2020 extended the time limit for Nidhi Companies for making a declaration in Form NDH-4. The government has substituted the word “six months” to “nine months” in the latest notification.

Declaration in NDH-4 by Nidhi Companies

FORM NDH-4 is used for filing application for a declaration as Nidhi Company and to update status by Nidhis. In the Form, the company has to provide the following information:

  • CIN
  • Name of the Company
  • Address & Email id of the Company
  • Equity paid-up capital
  • Number of members as on date of application/ updating status
  • Whether the Company is doing activities as permitted and as per its MOA & AOA
  • Whether the company has carried out any monetary transactions with any person other than its members
  • Complied with Nidhi Rules
  • Number of branches opened by the company and places along with dates of opening
  • The ratio of net owned funds to deposits acknowledged
  • Is the ratio of loan on immovable property within the prescribed limit.

 The new time limit for filing form NDH-4 to Central Government is as under:

Time limit for filing NDH-4

  • Incorporated before Nidhi Amendment Rules, 2019 i.e. 15.08.2019

 The Company has to file the Form within a period of one year from the date of its incorporation or within 9 months of the Nidhi Amendment Rules i.e. 15.08.2019 whichever is later.

  • Incorporated on or after Nidhi Amendment Rules, 2019 i.e. 15.08.2019

The Company has to file the Form within 60 days of the expiry of one year from the date of incorporation or extended period (as granted by concerned Regional Director).

 Note:

In case a company does not comply with the above requirements, it shall not be allowed to file Form No. SH–7 (Alteration of share capital) and Form PAS–3 (Return of Allotment).

Also Read: How to incorporate Nidhi Company in India?

What is Nidhi Amendment Rules, 2019?

Nidhi Amendment Rules

MCA has amended the provisions related to NIDHI Companies under the Companies Act and the Rules with effect from 15th August 2019. This amendment was done in order to make compliance for Nidhi Companies more effective and smoother. These modified provisions of the Companies Act (Section 406) and Nidhi rules (as amended w.e.f. 15.08.2019) require that the Nidhi companies have to apply to the Central government to update their status and declaration as Nidhi Company in Form NDH-4.

In this amendment, the time limit for filing the Form NDH-4 are:

  • Companies incorporated as Nidhi before Nidhi Amendment Rules, 2019, have to file the Form within a period of one year from the date of its incorporation or within 6 months of the Nidhi Amendment Rules i.e. 15.08.2019 whichever is later.
  • Companies incorporated as Nidhi on or after Nidhi Amendment Rules, have to file the Form within 60 days of the expiry of one year from the date of incorporation or extended period (as granted by concerned Regional Director).

The Mandatory Attachments with Form NDH 4 

  • Copy of resolution of the board of directors in support of the proposal of the company;
  • A certificate signed by two directors regarding the number of members as on date of application (membership should not be less than 200)
  • Certificate from the auditors of the company to the effect that the company has complied with the Nidhi Rules, 2014.
  • Copy of notification through which company was declared Nidhi under the Companies Act, 1956 or previous company law (where applicable)
  • Optional attachments (if any)

What are the mandatory Compliances for Nidhi Companies?

Form No.Particulars
NDH-1 (Return of Statutory Compliance)


• Within 90 days of the close of 1st Financial Year after its incorporation.
• Certified by CS in Practice or CA in Practice or Cost Accountant in Practice.
NDH-3
(Return of Nidhi Company for the half year ended)
NDH-3 is a half-yearly return which needs to be filed with the ROC (Registrar of Companies) within thirty days from the end of each half year.
NDH-4
(Form for filing application for declaration as Nidhi Company and for updation of status by Nidhis.)
• The Company incorporated on or before Nidhi Amendment Rules, 2019 have to file the Form within a period of one year from the date of its incorporation or within 9 months of the Nidhi Amendment Rules i.e. 15.08.2019 whichever is later.
• The Company incorporated on or after Nidhi Amendment Rules, 2019 have to file the Form within 60 days of expiry of one year from the date of incorporation or extended period (as granted by concerned Regional Director).
Form AOC-4 (Return for financial statements)Within 30 days of Annual General Meeting.
Form MGT-7 (Annual Return)

Within 60 days of Annual General Meeting.

Non- Compliance: All companies are required to confirm severe devotion to the provision of Companies Act, 1956/2013 and Nidhi Rules, 2014 as amended. In case of non-compliance with the provisions of these rules, the company and every official of the company who is in fault shall initially be punishable with a fine that may extend to Rs5,000 and further fine in case of extended violations.

The government has also guided the depositors to verify the status of Nidhi company from the notification issued by the central government in official gazette before making any investment or deposit.

Takeaway

By this modification, the investor can check the status of the Nidhi company and after satisfaction can do its investment. This is a positive change for the business environment and it will boost the ease of doing business too.

Want to register the Nidhi Company? Contact Registration Seva now

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