What is Nidhi Company Compliance?
A Nidhi Company is a type of Non-Banking Financial Company (NBFC) recognized under Section 406 of the Companies Act, 2013. Its core business is borrowing and lending money between its members.
To ensure the safety of members' deposits, the Ministry of Corporate Affairs (MCA) has laid down strict compliance rules (Nidhi Rules, 2014 & Amendments). Failure to comply can lead to heavy penalties and even the revocation of Nidhi status.
Annual Compliance Checklist
Every Nidhi Company must file the following forms annually to maintain its active status:
| Form | Purpose | Due Date |
|---|---|---|
| NDH-1 | Return of Statutory Compliances | Within 90 days of FY end (30th June) |
| NDH-3 | Half-Yearly Return | Within 30 days of half-year end (30th Oct & 30th April) |
| AOC-4 | Financial Statements | Within 30 days of AGM |
| MGT-7 | Annual Return | Within 60 days of AGM |
| ITR-6 | Income Tax Return | 30th September (Audit cases) |
Understanding NDH Forms
- NDH-1: Filed annually to certify that the company has maintained the required number of members (200) and Net Owned Funds (NOF) ratio.
- NDH-2: Filed to request an extension of time if the company fails to meet the minimum member or NOF requirements within the first year.
- NDH-3: A half-yearly return giving details of members, deposits, loans, and branch updates.
- NDH-4: A one-time declaration form to get "Nidhi Status" approved by the Central Government. Without this, a company cannot accept new deposits.
Post-Incorporation Requirements (First Year)
Within one year of incorporation, a Nidhi Company must ensure:
- Minimum Members: It must have at least 200 members.
- Net Owned Funds (NOF): It must have NOF of at least ₹20 Lakhs.
- Unencumbered Deposits: At least 10% of outstanding deposits must be kept as unencumbered term deposits in a scheduled commercial bank.
- Ratio: The ratio of Net Owned Funds to Deposits should not exceed 1:20.
Penalties for Non-Compliance
Non-compliance with Nidhi Rules is taken very seriously:
- Monetary Fine: Up to ₹5,000 initially, and ₹500 per day for continuing default.
- Officer Liability: Directors can be fined and may face imprisonment.
- Strike Off: The ROC may strike off the company name if it fails to file returns for two consecutive years.
- Inability to Accept Deposits: If NDH-4 is not approved or compliances are not met, the company is barred from accepting fresh deposits.
