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Nidhi Company Compliances: Key Requirements and Steps

Q: What is Form NDH-1 and when should it be filed?

Form NDH-1 is an important document that shows a Nidhi Company’s compliance with its members, deposits, and loans for the entire year. It must be filed within 90 days after the end of the financial year. This form helps the government keep track of the company’s operations and ensures it follows all necessary legal requirements.

Q: Can a Nidhi Company open branches outside its state?

A Nidhi Company can open branches outside its main district, but there is a limit. It can have up to three branches without needing special approval. If the company wants to open more than three branches in different states or districts, it must first get approval from the government. This ensures that Nidhi Companies operate responsibly.

Q: What is the maximum loan a Nidhi Company can give to a member?

A Nidhi Company can give loans to its members, but the maximum loan limit depends on the amount of money the company holds in deposits. The loan amount should be within certain limits set by the company’s net owned funds (NOF) and the total amount of deposits. The company must maintain a balanced ratio to ensure financial stability.

Q: What happens if a Nidhi Company doesn't get NDH-4 approval?

NDH-4 is a form that must be filed by a new Nidhi Company to get official recognition from the government. If the company doesn’t get approval within 120 days of registration, it cannot accept deposits or give loans to its members. This approval ensures the company meets all the legal requirements to operate as a Nidhi Company.

Q: What is the difference between Form NDH-1, NDH-2, and NDH-3?

Form NDH-1 is filed yearly to show compliance with statutory rules, like membership and loans. Form NDH-2 is used to report the company’s failure to meet the required compliance. Form NDH-3 is filed every six months to update the government on the company’s deposits and loans. Each form serves a different purpose to keep the company’s operations transparent.

Q: Can a Nidhi Company accept deposits or give loans to non-members?

No, a Nidhi Company can only accept deposits and offer loans to its members. It cannot involve non-members or outsiders in its financial transactions. This rule ensures that the company operates as a member-based cooperative, promoting savings and lending within a trusted group. Violating this structure could lead to penalties.

Q: What is the minimum paid-up capital required to start a Nidhi Company?

To start a Nidhi Company, the minimum paid-up capital must be ₹10 lakh. This money is invested by the members and is used for the company’s operations. The paid-up capital helps build trust and ensures the company has enough funds to lend to its members and meet its financial needs.

Q: What happens if a Nidhi Company fails to meet the Net Owned Fund (NOF) requirements?

If a Nidhi Company fails to maintain the required Net Owned Fund (NOF), it could face penalties. The minimum NOF requirement is ₹20 lakh after one year of operation. Not meeting this requirement could lead to the company losing its registration or facing fines. It is important to meet NOF to ensure the company’s financial health and compliance.

Q: How often does a Nidhi Company need to file Form MGT-7?

Form MGT-7 is the company’s annual return, which includes information about the company’s directors, shareholding, and any changes during the year. It must be filed every year within 60 days after the Annual General Meeting (AGM). This form helps keep the company’s records up to date and ensures transparency with the government.

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Frequently Asked Questions (FAQs)

What is the minimum number of members a Nidhi Company must have?

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A Nidhi Company must have at least 7 members when it is first incorporated. These members are the people who will join the company to save money and take loans. They are also known as the shareholders. The company must maintain a minimum of 200 members within the first year of operation to stay compliant with the rules.

What is Form NDH-1 and when should it be filed?

Can a Nidhi Company open branches outside its state?

What is the maximum loan a Nidhi Company can give to a member?

What happens if a Nidhi Company doesn't get NDH-4 approval?

What is the difference between Form NDH-1, NDH-2, and NDH-3?

Can a Nidhi Company accept deposits or give loans to non-members?

What is the minimum paid-up capital required to start a Nidhi Company?

What happens if a Nidhi Company fails to meet the Net Owned Fund (NOF) requirements?

How often does a Nidhi Company need to file Form MGT-7?

What is the penalty for not filing NDH-1 on time?

Can a Nidhi Company change its name?

What is the role of directors in a Nidhi Company?

What are the restrictions on dividend payments for a Nidhi Company?

Why Choose RegisterKaro for Your Nidhi Compliance?

At RegisterKaro, we make Nidhi Company compliance simple, ensuring your business stays legally sound and stress-free.

Expert Guidance Through Complex Rules: We understand that Nidhi Company Compliances can be confusing. Our experts guide you step-by-step through all the rules. We make sure you follow every law correctly so your company stays safe and legal.
Never Miss a Deadline, Avoid All Penalties: We keep track of all important dates for you. With our reminders and support, you will never miss a filing deadline. This helps you avoid fines and penalties that can hurt your business.
End-to-End Support: From registration to annual filings, we handle everything. Our team helps with document preparation, form submissions, and answering your questions. We make the whole process smooth and stress-free.
Transparent and Affordable Pricing: Our pricing is clear with no hidden fees. We offer affordable packages that fit your budget. You get expert help without worrying about extra costs.

Why Choose RegisterKaro for Your Nidhi Compliance?

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