FILING OF ‘NDH-1’ FORM BY NIDHI COMPANIES FOR STATUTORY COMPLIANCES

[Mr. M. GOVINDARAJAN]

Nidhi Company

Rule 3(1) (da) of Nidhi Rules defines the Nidhi Company as a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with the rules made by the Central Government for regulation of such class of companies.

Public Company

Every Nidhi Company shall be a public company and shall have a minimum paid up equity share capital of Rs.10 lakhs.  Every ‘Nidhi’ shall have the last words ‘Nidhi Limited’ as part of its name.   No Nidhi company shall issue preference shares.

No Nidhi company shall have any object in its Memorandum of Association other than the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

Requirements to be complied

Every Nidhi shall, within a period of one year from the date of its incorporation, ensure that it has-

• not less than 200 members;
• Net Owned Funds of Rs.10 lakhs or more;
•  unencumbered term deposits of not less than 10% of the outstanding deposits as specified in rule 14; and
• ratio of Net Owned Funds to deposits of not more than 1:20.

What is Net Owned Funds?

Rule 3(1)(d) defines the expression ‘net owned funds’ as the aggregate of paid up equity share capital and free reserves as reduced by accumulated losses and intangible assets appearing in the last audited balance sheet.  The amount representing the proceeds of issue of preference shares shall not be included for calculating Net Owned Funds.

NDH – 1 form

Rule (2) requires the Nidhi Company to file a return of statutory compliances in Form NDH-1 with the Registrar of Companies.    This form shall be filed within 90 days from the close of the first financial year after its incorporation.  The form shall be duly certified by a company secretary in practice or a chartered accountant in practice or a cost accountant in practice.  The fees payable for filing this form is depending upon the nominal share capital.  The fees details are described as below-

Share capital-

• if less than Rs.1 lakh – Rs.200/-
• if it is between Rs.1 lakh and Rs.4,99,999 – Rs.300/-
• if it is between Rs.5 lakhs and Rs.24,99,999 – Rs.400/-
• if it is between Rs.25 lakhs and Rs.99,99,999 – Rs.500/-
• if it is more than Rs.1 crore – Rs.600/-

Additional fee is payable along with the normal fees, if the said form is filed after the time limit prescribed, i.e., after 90 days from the close of the financial year after its incorporation.  The additional fee payable is as below-

• up to 30 days – 2 times of normal fees.
• More than 30 days and up to 60 days – 4 times of normal fees;
• More than 60 days and up to 90 days – 6 times of normal fees;
• More than 90 days and up to 180 days – 10 times of normal fees;
• More than 180 days – 12 times of normal fees.

In the said form the following particulars are to be furnished-

• Number of subscribers to the memorandum;
• Number of members admitted from the date of incorporation to the end of first financial year;
• Number of members ceased to be members up to the end of financial year;
• Whether the number of members as at the end of the financial year is 200 or more; if it is less than 200 it is to be informed as to whether extension of time has been applied to Regional Director; if it is applied the SRN of the application is to be mentioned;
• Details of-

• Paid up equity share capital;
• Free reserves;
• Accumulated losses;
• Other intangible assets;
• Net owned funds

• Details of unencumbered deposits deposited in commercial banks and post offices;
• Deposits outstanding at the close of the last working day of the second preceding month;
• Ratio of unencumbered deposit to deposits outstanding;
• Ratio of net owned funds to deposits;

This form is to be signed digitally by the Director, Manager, Company Secretary, CFO, CEO authorized by the Board.  This e-form needs to be verified by a practicing professional. Enter the details of the practicing professional and attach the digital signature.

The following documents are to be attached along with this form-

• List of all members with PAN and complete residential address;
• Amount of deposit accepted from each member;
• Break-up of deposits with bank name, branch and account number
• Break-up of deposits with name and location of P.O branch.

The eForm will be auto-approved in STP mode. On processing of the e-Form the details will be saved with MCA.   On successful submission of the e-Form NDH-1, SRN will be generated and shown to the user which will be used for future correspondence with MCA.  Challan will also be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgement to the user that the e-Form has been filed.

Extension of time

If a Nidhi is not having less than 200 members or ratio of Net Owned Funds to deposits of not more than 1:20 it shall within 30 days from the close of the first financial year, apply to the Regional Director in Form NDH-2 along with fee specified as below for extension of time-

Share capital-

• if less than Rs.1 lakh – Rs.200/-
• if it is between Rs.1 lakh and Rs.4,99,999 – Rs.300/-
• if it is between Rs.5 lakhs and Rs.24,99,999 – Rs.400/-
• if it is between Rs.25 lakhs and Rs.99,99,999 – Rs.500/-
• if it is more than Rs.1 crore – Rs.600/-

Additional fee is payable along with the normal fees, if the said form is filed after the time limit prescribed, i.e., after 90 days from the close of the financial year after its incorporation.  The additional fee payable is as below-

• up to 30 days – 2 times of normal fees.
• More than 30 days and up to 60 days – 4 times of normal fees;
• More than 60 days and up to 90 days – 6 times of normal fees;
• More than 90 days and up to 180 days – 10 times of normal fees;
• More than 180 days – 12 times of normal fees.

The Regional Director may consider the application and pass orders within 30 days of receipt of the application.  The Regional Director may extend the period upto one year from the date of receipt of application.

Penalty

 If the failure to comply with this rule extends beyond the second financial year, Nidhi shall not accept any further deposits from the commencement of the second financial year till it complies with the provisions contained in this rule and gets itself declared under sub-section (1) of section 406 as a Nidhi Company, besides being liable for penal consequences as provided in the Act.

Non applicability

Rule 5, which requires filing Form NDH–1, is not applicable to the Nidhi Companies incorporated on or after 19.04.2022.