Nidhi Company Compliance
A Nidhi Company is a type of NBFC (Non-Banking Financial Company). It is also known as Mutual Benefit Finance Company. Nidhi Company is an ideal choice for people who want to operate a lending business with low funds investment. This form of company is basically established as a Non- Banking Finance Company under the Companies Act, 2013.
Like every other form of Company, Nidhi Company needs to file the required Nidhi Company Annual compliance. The statutory compliance for Nidhi Companies is mentioned in the Nidhi Rules 2014 and The Companies Act 2013.
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Requirement of Compliances
Compliances are necessary to generate accurate insights about the working and performance of the Company.
Every Company registered under The Companies Act 2013 is required to file the prescribed compliances.
Additionally, Nidhi Company is a public company. To safeguard the interest of stakeholders it is mandatory to follow the compliances.
Compliances can be divided into two categories for NIdhi Company organization in India. There are one-time compliances and annual compliances.
Checklist for Compliances Carried out by a Nidhi Company
The following checklist of compliances have to be carried out by a Nidhi Company:
What are the types of Compliances required to be followed by a Nidhi Company?
There are different types of compliances required for a Nidhi Company. The following are the types of compliances required to be carried out by a Nidhi Company:
One Time compliance is a form of compliance that is carried out by the company either once the company is incorporated. This form of compliance requirement can either be only be carried out once when the company is incorporated.
An annual compliance is required to be carried out by the Nidhi company after it is incorporated. Such annual compliance has to be carried out regularly by the company annually to comply with the requirements of the law.
One-Time Compliances for Nidhi Company
One-time compliances are those that are required to file only once at the time of registration of business entity. Additionally, these compliances also denote any changes in Company that are non-periodical.
These compliances are non-reoccurring in nature. They are not required to file repeatedly.
List of one-time compliances for Nidhi Company
- Any change in the name of the Company
- Filing /Any change in the address of the registered office
- Filing /Any amendment in Objects of the Company
- Any change in the capital structure of the Company
- Appointment of Director
- Appointment of Auditor
- Resignation of Director
- Resignation of Auditor
Annual Compliances for Nidhi Company
Annual compliances, unlike one-time compliances, are periodical in nature. These need to be filed after regular intervals of time. Most of these are presented annually.
These compliances report about the status and performance of Nidhi Company during a period.
A Nidhi Company has to meet compliances prescribed in the Companies Act 2013 as well as in Nidhi Rules 2014.
List of annual compliances for Nidhi Company
The Nidhi Companies are required to file NDH-1 accompanied by the prescribed fees. Additionally, it must be duly certified by the company secretary or chartered accountant or cost accountant in practice.
This return has to be filled within 90 days, counting from the end date of the first or second financial year (Whichever Applicable) after the incorporation stage.
The Nidhi Companies are required to file form NDH-2 along with prescribed fees. This form is submitted with the Regional Director to request for extension of time as in case of failure to meet the following compliances:
1. Inability to add 200 members in a financial year
2. Failure to maintain the net owned funds to deposit ratio of 1:20
Regional Director can accept and pass orders within 30 days counting from the date of receipt of application.
NDH 3 is a half-yearly return to be filed by a Nidhi Company.
Maintenance of Books of Accounts
Every Nidhi company needs to ensure timely maintenance of books of accounts.
Maintain Statutory Registers
Maintenance of statutory registers as per the Companies Act 2013 is one of the mandatory compliances for a Nidhi company.
Convene Statutory Meetings
It is mandatory for every Nidhi Company to conduct meeting of Board of Directors and meeting of Shareholders.
Preparation of Financial Statements
The Nidhi Company has to prepare financial statements. Financial statements comprise Profit & Loss Account, Balance Sheet and Cash Flow Statement.
Income Tax Returns
It is mandatory for a Nidhi Company to file annual income tax returns by 30th September of the next financial year.
Financial Statement Returns Filing (AOC-4 )
The form AOC-4 is filled with details of the financial statements of the Company. This form is supported by other documents that are prescribed to upload along with this form.
Annual Return Filing (MGT-7 -ROC Annual Returns)
It is obligatory for a Nidhi Bank to file an annual return with the Ministry of Corporate Affairs (MCA) through Form MGT-7.
Benefits of NIDHI COMPANY Annual Compliance
By complying with the requirements of the Registrar of Companies and the Ministry of Corporate Affairs, the Nidhi Company and partners will increase their reputation in the eyes of the public. Through this process a Nidhi Company can increase its compliance requirements. More investors would be willing to invest in an Nidhi Company that complies with the requirements of the law.
By filing all compliances within a particular period of time, the Nidhi Company would be free from any form of compliance requirements. By considering this, an Nidhi Company can fulfil its objectives.
By complying with the requirements of the authorities, the Nidhi Companys would face lesser burden when it comes to compliance requirements. If compliances are not followed up or filed by the Nidhi Company, it can be detrimental to the development of the Nidhi Company. Hence it is crucial that all the requirements related to compliance are followed by the partners of the Nidhi Company.
Filing compliances on time is mandatory for every Nidhi company. Not meeting the same can attract penalty for the Nidhi Bank Operators.
If the Company fails to meet the compliance, the entity and concerned officers will be fined up to the extent of Rs 5000.
In case the infringement continues, the further fine will be Rs 500 every day.
Therefore, it is crucial to take compliance maintenance services from industry expert professionals.
In order to avoid penalties, one should file compliances on time. The following are the due dates for filing compliance for a Nidhi Company.
AGM (Annual General Meeting)
30 th September
Within 30 days of AGM
Within 60 days of AGM
Within 90 Days of Financial Year
Income Tax Return
Frequently Asked Questions
Nidhi is a financing company which is considered as a Non Banking Financial Company (NBFC) registered under the provisions of the Companies Act, 2013. It is understood as a mutual benefit company.
Yes there are compliances under the companies act, 2013 for a Nidhi Company.
The following compliances have to be fulfilled by the Nidhi Company within the year of incorporation:
• Net Owned Fund – 10 Lakhs or More
• 200 Members must be present in the Nidhi Company
• Ratio of NOF 1:20
• Unencumbered Deposits should be less than 10% of the total outstanding deposits.
There are different forms of compliances carried out by a Nidhi company:
• Annual compliances
• One time compliance
• Event based compliance
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