The Nidhi Company requires to comply with the provisions mentioned under the Companies Act, 2013 and Nidhi Rules, 2014. Nidhi Company is a Public Limited Company and so required to follow all the provisions applicable to a Public Limited Company.
Introduction to Nidhi Company
Nidhi Company in India is formed, governed and regulated by the Companies Act 2013, the Nidhi Companies Rules 2014 and Chapter XXVI of the Companies Rules, 2014. The Nidhi Company aims to encourage savings amongst its members and to fulfil its aim/objective of cultivating the habit of saving amongst its members. Nidhi Company takes a deposit and lends it to members only.
Nidhi Company is a certain kind of NBFC. However, it is not regulated by RBI, but RBI has the power to issue directives for it related to its deposit acceptance activities. The Nidhi Company is exempted from the RBI Act’s core provisions because it only deals with its members.
Prerequisite and Post-requirements of Nidhi Company Formation
The following are the criteria that are required to be fulfilled before incorporating or establishing a Nidhi Company:
- The Company should use the suffix “Nidhi Limited” in its name.
- The Company should be a Public Company.
- Minor, Body Corporate and Trust should not be admitted as members of Nidhi Company.
- The minimum paid-up share capital should be Rs. 5 lakhs.
- The Company should not issue preference shares; if the Company issues the shares before the enactment of the Act, the same shall be redeemed.
- The primary objective/aim of the Nidhi Company should be to inculcate the habit of savings in its members.
A Nidhi Company has to satisfy the following conditions within one year of incorporation:
- A minimum number of members should be 200.
- The net owned fund should be 20 lakhs (the net owned fund is the aggregate of paid-up capital and free reserves reduced by the accumulated and intangible assets as appearing in the last balance sheet).
- The net owned funds and the deposits are in a ratio not exceeding 1:20.
- The unencumbered term deposits are not less than 10% of the outstanding deposits.
Nidhi Company Forms
There are various Nidhi Company forms with a different use. Each form is mandatorily required to be filed by the Nidhi Company.
| Form | Time limit | Explanation |
| NDH 1 | Within 90 days of closure First / second financial year | Nidhi Company requires to file with the registrar of companies a return of statutory compliances |
| NDH 2 | Within 30 days of closure first financial year | If Nidhi Company has complied with requirements of Rule 5(1), it is required to file with registrar for an extension of time |
| NDH 3 | 30th October Or 30th April | Nidhi Company requires to file half yearly return |
| NDH 4 | Nidhi Company incorporated on or after Nidhi Amendment Rules, 2019 within 60 days from the date of expiry of 1 year from the incorporation or the period up to which the extension. Nidhi Company incorporated before the Amendment- up to 15th February 2020 | The Nidhi Company requires to file this form with the registrar and central government after being satisfied that it satisfies the compliances/requirements. Failure to file this form restricts filing of some other forms too. |
| AOC 4 | Within 30 days of AGM (Annual General Meeting) | Nidhi Company requires to file a financial statement along with the Directors report, extract of annual return and financial statements of the company. |
| MGT 7 | Within 30 days of approval of the director’s report by the Board | Nidhi Company requires to file the form with registrar of companies |
| MGT 14 | Within 30 days of approval of director’s report by the Board | Nidhi Company requires to file this form with registrar of companies |
| DIR 3 KYC | Up to 30th September | Nidhi Company requires to file this form with registrar of companies for every director of the company. |
Conclusion
The Nidhi Company is a public limited company that only deposits and lends funds from members. It has to stay compliant with the provisions of the Companies Act 2013[1], Nidhi Company Rules, 2014 and Companies Rules, 2014. There are various Nidhi Company forms that are provided under the laws related to the Nidhi Company. Such forms are required to be filed mandatorily by the Nidhi Company.
