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Posted on November 27, 2021
Post Incorporation Compliance for Nidhi Limited Companies
Nidhi Company is basically an NBFC or a Non-Banking Financial Company. These are formed to mee the basic objective of borrowing and lending money to its members. This works on the principle of mutual benefits. It is functioning mostly in the Southern Part of the country. A Nidhi Company need not receive a license from the Reserve Bank of India (RBI), which makes it easy to form. But should have words, ‘Nidhi Limited’ added to name of company.
Some of the major objectives of the Nidhi Company are given below:
– To cultivate a habit of saving among the members of the company,
– Receiving deposits from members and lending funds for mutual benefit along with complying with the rules made by the Central Government with regard to the same.
Post-Incorporation Compliance for Nidhi Limited Companies
Conditions to be satisfied after Incorporation
Within a time, limit of 1 year from the date of incorporation a Nidhi Company should:
- Have a minimum of 200 members
- A net owned fund of INR 10 Lakhs or more
iii. As specified under Rule 14 of the Nidhi Rules, 2014, the deposits should not be less than 10% of the outstanding deposits
- The ratio of a Nidhi Company should be 1:20 in case of Net Owned Funds to Deposits.
- Proper Books of Accounts should be maintained
- Statutory Registers should be maintained
- The company should hold Statutory Meetings
- Compliance by Nidhi Company w.r.t Companies Act
- A Board Meeting should be held and the resolutions for various matters like:
– Opening of bank account,
– Obtaining Company Stationery,
– Issuing share certificates for the members of the company,
– Appointing first auditors of the company,
– Drafting membership forms for obtaining the deposits and giving loans.
- Form ADT-1 is to be filed for appointing of First Auditors of the company with the MCA (Ministry of Corporate Affairs) within 15 days of such appointment.
iii. File Form 20A by obtaining a bank statement as proof for the same after remitting the amount as per the subscription made by the promoters from their banks.
- File Form NDH-1 Return of Statutory Compliance, which contains all the details regarding members, deposits, loans, reserves, etc. for the full financial year in the e-Form named as, GNL-2 for submission of the documents with the Registrar. And should be filed Within 90 days from the close of the financial year along with prescribed fees.
- File Form NDH-2Application for Extension of Time and should be filed in the case, the company fails to add at least 200 members within one year of incorporation or also in case of afailure to maintain the Net owned Fund to deposit ratio at 1:20.
It should be filed with the Regional Director within 90 days from the closure of the financial year along with the prescribed fees.
- File Form NDH 3, which is to be filed on a Half-yearly basis with the ROC (Registrar of Companies), and to be filed within 30 days from the conclusion of half a year. It must also be duly certified and authorized by a practicing professional.
vii. File Form AOC-4, financial documents, and other supporting documents to the Registrar of Companies and within 30 days of the annual general meeting.
viii. File Form MGT-7 Annual Return within 60 days of the Annual General Meeting.
Penalties for Non-Compliance
If the filing of forms is not done on a timely basis, the same would attract penalties which are enlisted below:
– The organization and its officers would attract a fine amounting to INR 5,000.
– If such non-compliance is continued further, the company will be charged a further fine of INR 500 per day.
Points to be noted For Allotment of Shares by Nidhi Company
- No body corporate or trust or minor shall be admitted as a member of the Nidhi Company.
- The nominal value of shares of a Nidhi Company shall not be less than INR 10.
- A Nidhi Company shall allot shares worth a minimum of INR 100 or 10 shares in number. And a savings or recurring account holder should be having at least one share of INR 10.
- Deposits in the case of a minor can be done only if the same is made by a legal guardian of the minor.
The earning of a Nidhi Company is majorly from the interest charged on providing loans to the members which would also include the interest to be provided on the deposit made by the members. The Nidhi company can also earn income via renting the locker facilities available with them.
There are also certain event-based compliances for the Nidhi Company which includes:
– Any change in company’s name,
– Change in the Registered Office,
– Appointment or removal or resignation or change of auditor,
– Appointment or removal or resignation or change of director,
– Transfer of shares,
– Amendment in company’s objective,
– Increase in the authorized capital of company,
– Appointment of key managerial personnel.