NIDHI COMPANY COMPLIANCES
- A public company that has been incorporated as a Nidhi and has a share capital of Rs. 10 lakh must first apply to the Central Government to be recognized as a Nidhi by submitting Form NDH-4 with a minimum of 200 members and a NOF of Rs. 20 lakh within 120 days of its incorporation.
- The company’s founders and directors must adhere to the rules’ requirements for being fit and proper people.
- For prompt resolution, it is also stated in the modified rules that if the Central Government does not communicate a decision within 45 days of receiving applications submitted by enterprises on form NDH-4, approval would be assumed to have been given. This would apply to businesses that would be incorporated after the 2022 implementation of the Nidhi (Amendment) Rules.
Prerequisites for Forming a Nidhi Company
It is necessary to meet the following criteria in order to establish a Nidhi company:
- The name of the business must include “Nidhi Limited.”
- The business must be publicly traded.
- Nidhi does not accept minors, corporations, or trusts as members.
- The paid-up share capital must be a minimum of Rs. 10 lakh.
- Preference shares that have already been issued by the company before the Act’s start date must be redeemed. The corporation is not permitted to issue preference shares.
- The company’s main goal must be to instill in its members a habit of conserving money.
Nidhi Company Post Incorporation Requirements:-
As soon as a Nidhi company is incorporated, it must meet the following requirements:
- 200 members must be the bare minimum.
- There must be Rs. 10 lakh in net-owned funds. (Net owned funds are paid-up capital plus free reserves added together, then the cumulative and intangible assets as shown on the most recent balance sheet are subtracted.)
- The ratio of net owned funds to deposits must not be more than one to twenty, or 1:20 for net owned funds to deposits.
- In accordance with Rule 14 of the 2014 Nidhi Rules, unencumbered term deposits must represent at least 10% of the total amount of outstanding deposits.