A Nidhi company is a public company incorporated with the object of cultivating the habit of thrift and savings among its members, and of accepting deposits from and lending to its members. The Nidhi company is governed by the Nidhi Rules, 2014, and it is subject to a distinct compliance regime.
The Membership and Deposits
The Nidhi company must have a minimum of 200 members, and it must have a minimum paid-up equity share capital of ₹10 lakh. The company can accept deposits from its members, but it cannot accept deposits from the public. The deposits are subject to the limits prescribed by the rules, and the company must maintain the prescribed ratio of deposits to the net owned funds.
The Loans
The Nidhi company can lend only to its members, and the loans are subject to the limits and the security requirements prescribed by the rules. The company cannot lend to a non-member, and it cannot carry on any business other than the business of accepting deposits and lending to members.
The Annual Return
The Nidhi company must file the annual return in Form MGT-7, and it must also file the NDH-1, NDH-2, and NDH-3 returns with the ROC. The NDH-1 is the return of the deposits, the NDH-2 is the return of the loans, and the NDH-3 is the half-yearly return. The company must also file the financial statements in Form AOC-4.
The Penalty
The failure to comply with the Nidhi Rules is an offence. The company and its officers are liable to penalty, and the ROC may strike off the company or initiate prosecution. The Nidhi company is a regulated entity, and the compliance is enforced by the ROC and the Central Government.
Call to Action
Anuj Desai & Associates advises Nidhi companies on the regulatory compliance—from the membership and deposit limits and the loan restrictions to the annual returns and the NDH filings. If your Nidhi company needs assistance with its compliance, we can help.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
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