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Compliance for Nidhi Company

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A Nidhi Company is a type of Non-Banking Financial Company (NBFC) under Section 406 of the Companies Act, 2013, which primarily deals with borrowing and lending money among its members. Here are the key compliance requirements for a Nidhi Company in India:

Initial Compliances for Incorporation

  1. Incorporation:

    • Obtain Digital Signature Certificates (DSC) for directors and stakeholders.

    • Obtain Director Identification Number (DIN) for directors.

    • Reserve a unique name for the company through the Ministry of Corporate Affairs (MCA).

    • Prepare and file the incorporation documents with the Registrar of Companies (RoC).

  2. Memorandum and Articles of Association:

    • Draft the Memorandum of Association (MoA) and Articles of Association (AoA) compliant with Nidhi Company regulations.

    • Ensure the MoA includes objects related to accepting deposits and lending to members.

Ongoing Compliances

  1. Minimum Capital Requirement:

    • Ensure the minimum net owned fund of ₹10 lakhs is maintained as per Nidhi Rules, 2014.

  2. Membership and Deposit Rules:

    • Issue shares to members and maintain a register of members.

    • Accept deposits only from members and not from the public.

    • Comply with restrictions on the acceptance and repayment of deposits as per Nidhi Rules.

  3. Board Meetings:

    • Hold at least four board meetings in a year (one meeting every quarter).

    • Maintain minutes of meetings and resolutions passed.

  4. Financial Statements:

    • Prepare annual financial statements (Balance Sheet, Profit and Loss Account).

    • Ensure compliance with Accounting Standards prescribed under the Companies Act.

  5. Annual General Meeting (AGM):

    • Hold an AGM within six months from the end of the financial year.

    • Discuss and approve financial statements, director's report, and auditor's report.

  6. Annual Return:

    • File annual returns (Form MGT-7) with the RoC containing details such as financial performance, director's details, etc.

  7. Audit Requirements:

    • Conduct an annual audit of the financial statements by a qualified Chartered Accountant.

    • File the audit report (Form ADT-1) with the RoC along with the financial statements.

Compliance with Regulatory Authorities

  1. Registrar of Companies (RoC):

    • File various forms and documents with the RoC as per the Companies Act, 2013.

    • Update changes in registered office, directorship, shareholding, etc., with the RoC.

  2. Income Tax Returns (ITR):

    • File income tax returns (ITR) annually by the due date.

    • Avail tax exemptions applicable to Nidhi Companies under the Income Tax Act.

  3. Goods and Services Tax (GST):

    • Register under GST if applicable (based on turnover).

    • File periodic GST returns and comply with GST regulations.

  4. Employees' Provident Fund (EPF) and Employees' State Insurance (ESI):

    • Comply with EPF and ESI regulations if applicable (based on employee strength).

    • File monthly/quarterly returns and make contributions as required.

Additional Compliances

  1. Compliance Certificates:

    • Obtain compliance certificates from professionals (Company Secretary, Chartered Accountant) as required by law.

  2. Corporate Governance:

    • Adopt and follow good corporate governance practices.

    • Appoint an Independent Director (if applicable as per thresholds).

  3. Event-Based Compliances:

    • Notify RoC about changes in MoA, AoA, directorship, etc.

    • Obtain approval for significant transactions as per the Companies Act.

Penalties for Non-Compliance

Non-compliance with these requirements may result in penalties, fines, or legal actions against the Nidhi Company and its directors. It's crucial for Nidhi Companies to maintain proper records, adhere to regulatory guidelines, and ensure timely filing of returns and reports.

By choosing Corporate Verdict, you can rest assured that your Compliance for Nidhi Company will be handled efficiently, allowing you to focus on growing your business.

For more information or to start the registration process, visit our website or contact our team today!

Have any Questions?

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