MCA Alert : Make Investment into Complaint Nidhi Companies Only

MCA has issued an advisory to Investors and depositors of Nidhi Companies, that they should invest only to Companies making regular Compliances of Nidhi Rules, 2014 and Companies Act, 2013

Following are the text from MCA Advisory to Investors and Depositors

In order to make regulatory regime for Nidhi Companies more effective and also to accomplish the
objectives of transparency & investor friendliness in corporate environment of the country, the Central
Government has recently amended the provisions related to NIDHI under the Companies Act and the
Rules (effective from 15.08.2019).
Under Nidhi Rules, 2014, Nidhi is a company which has been incorporated as a Nidhi with the object
of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending
to, its members only, for their mutual benefit.
The amended provisions of the Companies Act (Section 406) and Nidhi rules (as amended
w.e.f. 15.08.2019) require that the Nidhi companies have to apply to the Central government for
updation of their status/ declaration as Nidhi Company in Form NDH-4.
2. The time-frame for applying to Central Government in form NDH-4 is as under:-
(I) Companies incorporated as Nidhi before Nidhi Amendment Rules, 2019 i.e. 15.08.2019 have
to apply within a period of one year from the date of its incorporation or within 9 months of the
Nidhi Amendment Rules i.e. 15.08.2019 whichever is later.
(II) Companies incorporated as Nidhi on or after Nidhi Amendment Rules, 2019 i.e. 15.08.2019
have to apply within 60 days of expiry of one year from the date of incorporation or extended
period (as granted by concerned Regional Director).
3. In case a company does not comply with the above requirements, it shall not be allowed to file
Form No. SH–7 (Notice to Registrar for any alteration of share capital) and Form PAS–3
(Return of Allotment).
4. Such companies are required to ensure strict adherence to provision of Companies Act,
1956/2013 and Nidhi Rules, 2014 as amended. In case of contravention of the provisions of
these Rules, the company and every officer of the company who is in default shall initially be
punishable with fine which may extend to five thousand rupees and further fine in case of
continuous violations.
5. Investors are advised to verify the status of Nidhi company from the notification issued by
Central Government in official gazette before making any investment or deposit.


Reference : http://www.mca.gov.in/Ministry/pdf/Nidhi_19032020.pdf 

Fastlegal Team

Fastlegal is an Online Legal Professional Services Provider Company providing Company Registration, LLP Registration, Nidhi Company Registration, Trademark Registration, GST Registration and Return Filing Services.

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