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Nidhi Company Compliance
Expert supervision and complete peace of mind for the stakeholders of Nidhi companies
About Nidhi Company Compliance
Nidhi Company is a business structure incorporated under Section 406 of the Companies Act, 2013 and is governed by the Ministry of Corporate Affairs (MCA), and there are certain Nidhi company rules to be followed in India.
Nidhi Company Compliance is guided by the Nidhi Rules 2014 and Nidhi (Amendment) Rules 2022. Nidhi company compliance is further tightened by Government of India in 2022 by Nidhi (Amendment) Rules 20022 to safeguard public interest.
Nidhi Company Compliance is a relatively complex one and need expert supervision to avoid any non-compliance. We in TRUSTLINK ensure complete peace of mind for the stakeholders of Nidhi companies.
Post-Incorporation Compliances
Total Nidhi Company Compliance can be separated in two parts – Post Incorporation Compliances and Regular Annual Compliances. Here are the necessary post-incorporation steps:
Click on the folders to read the notes
Appointment of Auditor
A newly incorporated Nidhi Company must appoint its first Auditor within 30 days of its incorporation for conducting statutory audit of books of accounts of the company for the financial year. The appointment of Auditor should be intimated to the ROC through ADT-1 form with necessary documents. The first Auditor shall hold the office till the conclusion of the first Annual General Meeting.
Commencement of Business
Like other companies, new Nidhi Companies also need to file INC 20A (Commencement of Business) by depositing paid up capital to its Nidhi Company Account which is minimum 10 Lakh as per Nidhi (Amendment) Rules 2022.
Number of Members
Number of members should be increased to at least 200 within one year of incorporation of the Nidhi Company.
Net Owned Funds
The net owned funds must be Rs 20 Lakh as per Nidhi (Amendments) Rules 2022. The net owned funds and deposits shall be in a ratio not exceeding 1:20.
Maintenance
Strict maintenance of books of accounts and statutory registers needs to be continuously followed.
Necessity to File NDH-4
It is compulsory to file NDH-4 form within 120 days after the expiry of one year from the date of incorporation of a new Nidhi Company. It is a declaration by a company to work as a Nidhi company by making net owned fund to 20 Lakh and minimum 200 members in the company.
Annual Compliance of a Nidhi Company
Nidhi Company Annual compliances are generally those compliances that include the status and performance of the Nidhi Company in the whole year. The filing of all the compliances of a Nidhi Company are done as per the Nidhi Rules 2014 and Nidhi (Amendments) Rules 2022.
NDH-1
Filed within 90 days from the closure of the first financial year. Details relating to members, deposits, loans, reserves for the financial year are intimated to ROC.
NDH-2 (If Applicable)
Within 30 days from the closure of the financial year, a Nidhi Company has to apply through this form relating to extension of timeline for not meeting requirements of members and deposits.
NDH-3
It is a half yearly return that is to be filed within 30 days from the closure of the half yearly relating to members, deposits, loans for the said duration.
NDH-4
Compulsory to file within 120 days after the expiry of 1 year of a new Nidhi Company. For an existing Nidhi Company, NDH-4 is to be filed within one year of its date of incorporation.
NDH-5 (If Applicable)
A Nidhi Company shall not close any branch without intimating at least 30 days prior to such events. This is done through form NDH-5 detailing formats of advertisements.
AOC-4
Filing of Form AOC 4 detailing all financial documents and all other supporting documents to the Registrar of Companies within 30 days of the Annual General Meeting.
MGT-7
It is an annual return detailing the list of members serving the company that to be filed within 60 days of Annual General Meeting.
ITR-6
Income Tax Return by 30th September.
Nidhi Company New Rules (Amendment 2022)
Nidhi Company Rules 2014 has been amended in 2022 as Nidhi (Amendment) Rules 2022 through the notification of Ministry of Corporate Affairs on 19th April 2022. Major changes made include:
- Prior Declaration Required: Public companies must obtain a prior declaration by the government of India (Form NDH-4) before accepting deposits to ensure investor protection.
- Filing NDH-4: Must be filed within 120 days of closure of one year from incorporation, having a minimum 200 members and Net Owned funds of Rs 20 Lakhs or more. The CG considers approval within 45 days.
- Fit & Proper Declaration: The Company should attach a declaration with regard to the fulfillment of fit and proper person by all its directors and promoters with the Form NDH-4.
- Capital Changes: Minimum paid up capital has been increased from 5 Lakh to 10 Lakh. Net owned funds have been changed from 10 Lakhs to 20 lakhs.
- Existing Companies: Companies incorporated prior to New Nidhi Rules 2022 shall comply with requirements within 18 months.
- Exemptions for New Companies: NDH 1 within 90 days shall not be applicable to Companies incorporated on or after the enforcement of the new rules.
- Loan Restrictions: A Nidhi Company shall not raise loans from banks or any financial institutions to advance the loans of its members.
- Branch Expansion: Nidhi Companies wanting to open more than 3 branches or branches outside the district need to apply with Form NDH 2.
- Dividend Cap: A Nidhi Company shall not declare dividends exceeding 25% in a financial year.
- Forms Updated: Changes are made to Form NDH 2, NDH 3, and NDH 4. Form NDH 5 has been introduced.
Documents Required for Nidhi Company Compliance
Documents requirements for Nidhi Company Compliance are very simple and only scan copies of the documents are required by the authorities.
- PAN Card, Aadhar Card and Voter ID of Directors and members
- Details of Directors
- Digital Signatures of the Directors
- Bank statement of the Nidhi Company accounts
- Details of books of accounts (members, loans, deposits)
- Incorporation Certificate and MOA
- Any other documents as required
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