A Nidhi Company is a non-banking Indian finance company which is recognized under section 406 of the Companies Act, 2013. The company’s core pursuit is to borrow and lend money to its members. Nidhi Registration is quite an easy procedure and doesn’t need the approval of ‘Reserve Bank of India’, unlike RBI regulates NBFC. Nidhi Company Registration is done as per the provision of Companies Act, 2013 as well as Public limited company. Around ‘80%’ of Nidhi Company Registration in India is been done in the state of Tamil Nadu. In this article, we have explained about Nidhi Company Registration: Amendment Rules 2020.
Provisions of Nidhi Company- Facts to know
Before you approach for Nidhi Registration, you must ensure the following:
- Your company must have at least ‘7 shareholders’ and ‘3 directors’
- The minimum capital required is ‘Rs. 5 lakh’, which is to be increased to ‘Rs. 10 lakh’ in the span of one year.
- Nidhi Company is regulated by the ‘Ministry of Corporate Affairs[1]’ and the registration is done as a public limited company.
- No sanction or approval from RBI is required for the formation or registration of the company. Nevertheless, RBI can guide and issue directions in the substance relating to deposit acceptance actions.
- The principal activities of such companies are to borrow and lend money to its ‘shareholders’ and ‘members’.
- Every firm recorded its registration as Nidhi needs to add ‘Nidhi Limited’ at the end of the company’s name.
Conditions to be fulfilled for getting ‘Nidhi’ status
Within one year of Nidhi Company’s registration the following given below conditions must be fulfilled:
- The requirement of the minimum members in the Nidhi Company is 200 members within one year from the date of commencement.
- The net funds owned by the Nidhi Company should be 10 lakh rupees or more.
Net owned funds = Addition of Equity share capital and free reserves and deduction of accumulated losses & intangible assets.
- The deposits of Unencumbered term must be 10% or more than that of the outstanding deposits.
- The ratio of the net owned funds to that of deposits shouldn’t be exceeding 1:20.
If the above conditions are satisfied by the Nidhi Company then within 90 days from the first financial year after incorporation it should file NDH-1 together with the prescribed fees. These forms shall be duly certified by the practicing CA/ CS/ CWA.
If the company needs extension by one financial year then within 30 days from the end of the first financial year, he can avail by submitting NDH-2 to the Regional Director.
What are the types of funds in Nidhi Company?
As specified above, under Nidhi Company Registration, the member can borrow and lend funds to/from its client. Such funds come in numerous shapes described below:-
What is the new Applicability’s on Nidhi Company?
The government of India has modified the original Nidhi rules 2014 by over and done with Nidhi (amendment) rules 2020. By means of new rules, the government has altered the ‘NDH forms’ which earlier send to ‘MCA’ as supplement attachments with ‘GNL-2’. The government has altered these forms into ‘e-forms’.
The New Nidhi (Amendment) Rules have come into force on 10th February, 2020. After the enforcement, all the Nidhi companies essentially need to file the ‘NDH-3’, ‘NDH-1’, and ‘NDH-2’ forms electronically.
Read our article:What is Nidhi Company? Know it’s Incorporation Procedure
Alteration of NDH-3, NDH-1 and NDH-2 into E-forms in Brief
Until this time, before the amendment, these forms used to send to MCA as an attachment. Even, no other accessory or Annexure was compulsory to attach with these forms. However, after the commencement of these amendments, forms will be altered into ‘E-forms’ and separate attachments desires to be sent to MCA with each form.
NDH-1 for Legislative Compliance’s – Annual Return of Nidhi Companies
There are few attachments that need to be attached with NDH-1
Those are as follows:-
- Comprehensive List of all active members with correct residential address till the year-end from the date of commencement, and PAN.
- Details regarding the amount of deposit acknowledged from each member Category wise. Those categories included saving amount/Fixed amount/Recurring amount). This is a mandatory requirement prescribed by the Government concerning the new amendment rules 2020.
- Details regarding the breakup of ‘unencumbered deposits’ preserved in ‘Scheduled Commercial Bank’. The list should express all the details including Bank Name, Branch, and Account No.
- Details regarding the breakup of ‘unencumbered deposits’ preserved in ‘Post Office’. The list should express all the details including Name, Post Office Branch, location, and Account No.
NDH-2:- Application for extension of time
There are few attachments that need to be attached with NDH-2.
Those are as follows:-
- A detailed report on the Board Resolution (with copies) by way of detailed Application of NDH-2 extension. It should mention few answers to questions, those are: – (a) Why the shares are not maintained, and (b) why the 200 members have not attained by the company.
- Comprehensive list of all active members along with complete residential address till the year-end from the date of commencement, and with PAN.
- Details regarding the breakup amount of deposit accepted from each member Category wise. Those categories included saving amount/Fixed amount /Recurring amount). This is a mandatory requirement prescribed by the Government concerning the new amendment rules 2020.
- Answers to all Reasonable interrogations and justification for the application
NDH-3 for Half Year Return of Nidhi Companies
There are few attachments that need to be attached with NDH-3.
Those are as follows:-
- Copies of advertisement along with the proof of indication given to Registrar of Company: – This attachment has been enumerated with this act in which we need to report concerning the starting or opening of Branch of Nidhi Company in the reporting Half-year
- Comprehensive List of all associates with PAN in addition to complete residential address: -Nidhi Company requires reporting a comprehensive list of members with their PAN numbers and completing address. This is a mandatory requirement prescribed by the Government concerning the new amendment rules 2020.
- Details regarding the amount of deposit accepted from each member Category wise. That category included saving amount/Fixed amount /Recurring amount). This is a mandatory requirement prescribed by the Government concerning the new amendment rules 2020.
- Detailed List of all members who merged or joined during the half-year period. They should display there complete residential address along with PAN.
- Detailed List of all members who ceased during the half-year period. They should display there complete residential address along with PAN.
Conclusion
The above described Nidhi New Amendment 2020 Rules are one of the most important to meet the terms of changes. For the reason that government will be keeping eyes on Nidhi company activities from end to end with these changes in a more substantial manner. Our Corpbiz group will be at your disposal if you want expert advice on any Nidhi Company Registration with compliance. We will help you to ensure complete process as per your desired activities, ensuring the fruitful and well-timed completion of your work.
Read our article: Operating Nidhi Company; Know about the Restrictions on Nidhi Company
