Nidhi Amendment Made in 2022
The Nidhi (Amendment) Rules, 2022, have been published by the MCA. Under the new rules, a public company that wants to be declared a Nidhi must fill out Form NDH-4 within 120 days of its incorporation to have these two requirements met.
a) There are at least 200 members;
b) It has Rs in Net Owned Funds. 20 crores or more
Additionally, if a company’s application on Form NDH-4 has been rejected by the government, or if the company has not complied with the requirements of the aforementioned rule or fails to comply with such requirement on or after the commencement of the Amendment Rules. Get all the Information on Nidhi Company from our Experts!
The members of that company are prohibited from making deposits or loans.
However, any deposit made by a company after the date of noncompliance, the date of the beginning of the aforementioned rules, or the date of rejection of the application in Form NDH-4 will be considered to have been made in accordance with Chapter V of the Act.
By which means that the deposit-related provision will apply and the deposit will be subject to all of the requirements outlined in that Chapter or any other provisions of the Act or the rules made thereunder, as the case may be.
Funds Structure for Nidhi Company:-
Additionally, the requirement for Net Owned Funds has been raised to Rs. 20 lakhs. In the past, the amount needed was Rs 10 lakhs.
The State has also raised the minimum amount of equity share capital that must be paid up for a Nidhi to Rs. Rs. 5 lakh to 10 lakh, while also specifying that every Nidhi in existence on the date of the Amendment Rules must comply with this requirement within an 18-month period.
Make a Nidhi Company Declaration:-
A release issued by the Ministry on Wednesday stated that public companies wishing to operate as Nidhi is must now obtain prior declaration from the central government before accepting deposits.
It stated that “before becoming its member, one must ensure declaration of a company as a Nidhi by the central government” in order to safeguard the public interest.
A Nidhi company is a non-banking financial company that is especially popular in southern states like Tamil Nadu. The borrowing and lending of funds among Nidhi members is their primary business.
“For timely disposal, amended rules also state that approval will be considered granted if the central government does not make a decision within 45 days of receiving applications in NDH-4 form from companies. According to the press release, “this will apply to such companies that shall be incorporated after Nidhi (Amendment) Rules, 2022.”
According to the ministry, more than 10,000 businesses were incorporated between 2014 and 2019. However, only approximately 2,300 businesses submitted forms NDH-4 for declaration. According to the report, “companies have not been complying with the applicable provisions of the Act and the Nidhi Rules, 2014 (as amended)” after examination of form NDH-4.