Declaration of Nidhis in Form NDH-4 and other amendments in The Nidhi (Amendment) Rules, 2019
Ministry of corporate affairs came up with some amendments in existing Nidhi Rules, 2014 through a Notification dated 01st july 2019. These rules may be called as Nidhi (Amendment) Rules, 2019 and shall come into force with effect from 15 August, 2019.
Declaration of Nidhis by New Nidhi Companies
In the Nidhi (Amendment) Rules, 2019, ministry aims toward improvising of governance in Nidhis. A new rule “3A” has been added in original rules to deal with “Declaration of Nidhis”.
Rule 3A: Declaration of Nidhis:- The Central Government, on receipt of application (in Form NDH-4 along with fee thereon) of a public company for declaring it as Nidhi and on being satisfied that the company meets the requirements under these rules, shall notify the company as a Nidhi in the Official Gazette:
Provided that a Nidhi incorporated under the Act on or after the commencement of the Nidhi (Amendment) Rules, 2019 shall file Form NDH-4 within sixty days from the date of expiry of:‑
(a) one year from the date of its incorporation; or
(b) The period up to which extension of time has been granted by the Regional Director under sub-rule (3) of rule 5:
Provided further that nothing in the first proviso shall prevent a Nidhi from filing Form NDH-4 before the period referred therein:
Provided also that that in case a company does not comply with the requirements of this rule, it shall not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).”
Declaration of Nidhis by Existing Nidhi Companies
23A. Compliance with rule 3A by certain Nidhis:– Every company referred to in clause (b) of rule 2 and every Nidhi incorporated under the Act, before the commencement of Nidhi (Amendment) Rules, 2019, shall also get itself declared as such in accordance with rule 3A within a period of one year from the date of its incorporation or within a period of six months from the date of commencement of Nidhi (Amendment) Rules, 2019, whichever is later:
Provided that in case a company does not comply with the requirements of this rule, it shall not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).
23B. Companies declared as Nidhis under previous company law to file Form NDH-4:– Every company referred in clause (a) of rule 2 shall file Form NDH-4 alongwith fees as per the Companies (Registration Offices and Fees) Rules, 2014 for updating its status:
Provided that no fees shall be charged under this rule for filing Form NDH-4, in case it is filed within six month of the commencement of Nidhi (Amendment) Rules, 2019:
Provided further that, in case a company does not comply with the requirements of this rule, it shall not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).
Conclusion: Every Nidhi company whether incorporated after or before commencement of The Nidhi (Amendment) Rules, 2019, required to file Form NDH-4 and if it failed to file Form NDH-4 on or before prescribed due date, they will not be able to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).
Other Major Amendments:
1. Applicability of Nidhi Rules, 2014: A new clause (d) has been inserted in Rule “2”, with this addition not applicability of Nidhi Rules, 2014 changed to:
Rule 2 Application- These rules shall apply to-
(a) Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956;
(b) Every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956; and
(c) Every company incorporated as a Nidhi pursuant to the provisions of section 406 of the Act.
(d) Every company declared as Nidhi or Mutual Benefit Society under sub-section (1) of section 406 of the Act.
2. Definition of Nidhi: ln the said rules, in rule 3, after clause (d)' the following clause shall be inserted 'namely'-
(da) “Nidhi” means 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.’.
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