All about Nidhi company

iGatrad2019 479 views 22 slides Sep 06, 2019
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About This Presentation

We have try to cover main aspects of Nidhi Company


Slide Content

NIDHI COMPANY
All you want to know is here…..
by CS Manoj V. Ayadi

What is Nidhi Company ?
NidhiintheIndiancontextmeanstreasure.However,intheIndian
financialsectoritreferstoanymutualbenefitsocietynotifiedby
theCentral/UnionGovernmentasaNidhiCompany.
Theyarecreatedmainlyforcultivatingthehabitofthriftand
savingsamongstitsmembers.TheCompaniesdoingNidhi
business,viz.borrowingfrommembersandlendingtomembers
only,areknownunderasNidhiCompany,
NidhiCompanyareformedonlyforthebenefitofitsmembersonly,
onoutsideri.e.whoisnotthemembersoftheNidhiCompanyare
notallowedtodepositanymoneyordoinganykindofbusiness
withtheconcernedNidhiCompany
Section406ofCompaniesAct2013andNidhiRule2014
governedthelawandprocedureforNidhiCompany.
by CS Manoj V. Ayadi

"Nidhi"meansacompanywhichhasbeenincorporatedasanidhi
withtheobjectofcultivatingthehabitofthriftandsaving
amongstitsmembers,receivingdepositsfrom,andlendingto,its
membersonly,fortheirmutualbenefit,andwhichcomplieswith
therulesmadebythecentralGovernmentforregulationofsuch
classofcompanies.
EveryCompanywhichhadbeendeclaredasaNidhiCompanyor
MutualBenefitSocietyundersub-section(1)ofsection620Aof
theCompaniesAct,1956
EverycompanyfunctioningonthelinesofaNidhiCompanyor
MutualBenefitSocietybuthaseithernotappliedfororhas
appliedforandisawaitingnotificationtobeaNidhiCompanyor
MutualBenefitSocietyundersub-section(1)ofsection620Aof
theCompaniesAct,1956
by CS Manoj V. Ayadi

Incorporation of Nidhi Company
ANidhiCompanytobeincorporatedundertheActshallbea
publiccompanyandshall
have a minimum paid up equity share capital of five lakh
rupees.
have a minimum Three Directors and Seven Members at the
time of application for registration
EveryCompanyincorporatedasaNidhishallhavethelastwords
‘NidhiLimited’aspartofitsname.
NidhiCompanycannotissuepreferenceshares.
by CS Manoj V. Ayadi

Post Incorporation Compliance
Every Nidhi Company shall, within a period of one year from the
commencement of these rules, ensure that it has:-
(a) Not less than two hundredmembers
(b) Net Owned Funds of ten lakh rupees ormore
(c)Unencumberedtermdepositsofnotlessthanten%
of the outstanding deposits as specified in rule 14
AND
(d) Ratio of Net Owned Funds to deposits of not more than1:20
by CS Manoj V. Ayadi

Rule 3A. Declaration of Nidhi
ProvidedthataNidhiincorporatedundertheActonorafter
thecommencementoftheNidhi(Amendment)Rules,2019
shallfileFormNDH-4withinsixtydaysfromthedateof
expiryof:-
(a)oneyearfromthedateofitsincorporationor
(b)theperioduptowhichextensionoftimehasbeen
grantedbytheRegionalDirector
TheCentralGovernment,onreceiptofapplicationinForm
NDH-4alongwithfeethereonofapubliccompanyfor
declaringitasNidhiandonbeingsatisfiedthatthecompany
meetstherequirementsundertheserules,shallnotifythe
companyasaNidhiintheofficialGazette:
1Rule3AamendmentEffectivefrom15thAugust2019.
by CS Manoj V. Ayadi

General Restrictions or Prohibitions
Cannotdothebusinessofchitfund,hirepurchase
finance,leasingfinance,insuranceoracquisitionof
securitiesissuedbyanybodycorporate;
Cannotissuepreferenceshares,debenturesorany
otherdebtinstrumentbyanynameorinanyform
whatsoever;
Cannotopenanycurrentaccountwithits
members(OnlySavingAccount);
RentalincomefromLockerfacilitiesshallnotexceed
24%.ofthegrossincomeoftheNidhi
by CS Manoj V. Ayadi

Cannotpledgeanyoftheassetslodgedbyits
membersassecurity;
Cannottakedepositsfromorlendmoneytoany
bodycorporate;
Cannotenterintoanypartnershiparrangementin
itsborrowingorlendingactivities;
Cannotissueorcausetobeissuedany
advertisementinanyformforsolicitingdeposit:
Cannotlendmoneytoanyotherpersonotherthan
member
by CS Manoj V. Ayadi

Membership
ANidhiCompanyshallnotadmitabodycorporateor
trustasamember.
Membershipnotreducedtolessthantwohundred
membersatanytime.
AminorshallnotbeadmittedasamemberofNidhi
Company
Providedthatdepositsmaybeacceptedinthenameof
aminor,iftheyaremadebythenaturalorlegal
guardianwhoisamemberofNidhi.
by CS Manoj V. Ayadi

Allotment of Share for
Membership
Nidhishallissue
1
[fullypaidup]equitysharesofthe
nominalvalueofnotlessthantenrupeeseach:
Noservicechargeshallbeleviedforissueofshares.
Nidhishallallottoeachdepositholderatleasta
minimumoftenequitysharesorsharesequivalentto
onehundredrupees:
Providedthata savingsaccountholderanda
recurringdepositaccountholdershallholdatleast
oneequityshareofrupeesten
by CS Manoj V. Ayadi

Rate of interest
Therateofinteresttobechargedonanyloangiven
byaNidhishallnotexceedsevenandhalfpercent.
abovethehighestrateofinterestofferedon
depositsbyNidhiandshallbecalculated
onreducingbalancemethod:
ProvidedthatNidhishallchargethesamerateof
interestontheborrowersinrespectofthesame
classofloansandtheratesofinterestofallclasses
ofloansshallbeprominentlydisplayedonthe
noticeboardattheregisteredofficeandeach
branchofficeofNidhi.
by CS Manoj V. Ayadi

Dividend
ANidhiCompanyshall notdeclaredividend
exceedingtwentyfivepercent .orsuchhigher
amountasmaybespecificallyapprovedbythe
RegionalDirectorforreasonstoberecordedinwriting
andfurthersubjecttothefollowingconditions,
namely:-
(a)anequalamountistransferredtoGeneralReserve
(b)therehasbeennodefaultinrepaymentofmatured
depositsandinterestand
(c)ithascompliedalltherulesasapplicabletoNidhis
by CS Manoj V. Ayadi

Deposit-Tenure & Interest
ANidhishallnotacceptdepositsexceedingtwentytimesofitsNet
OwnedFunds(NOF)asperitslastauditedfinancialstatements.
Thefixeddepositsshallbeacceptedforaminimumperiodofsix
monthsandamaximumperiodofsixtymonths.
Recurringdepositsshallbeacceptedforaminimumperiodof
twelvemonthsandamaximumperiodofsixtymonths.
Themaximumbalanceinasavingsdepositaccountatanygiven
timequalifyingforinterestshallnotexceedonelakhrupeesatany
pointoftimeandtherateofinterestshallnotexceedtwopercent
abovetherateofinterestpayableonsavingsbankaccountby
nationalisedbanks.
ANidhimayofferinterestonfixedandrecurringdepositsatarate
notexceedingthemaximumrateofinterestprescribedbythe
ReserveBankofIndiawhichtheNon-Banking
by CS Manoj V. Ayadi

Loans
A Nidhi shall provide loans only to its members.
Providedfurtherthatamembershallnotbeeligible
foranyfurtherloanifhehasborrowedanyearlierloan
fromtheNidhiandhasdefaultedinrepaymentofsuch
loan.
ANidhishallgiveloanstoitsmembersonlyagainstthe
followingsecurities,namely:-
oGold,silverandjewellery,
oimmovableproperty,
ofixeddeposit,receipts,
oNationalSavingsCertificates,
ootherGovernmentSecuritiesand
oinsurancepolicies
by CS Manoj V. Ayadi

The loans given by aNidhito a member shall be subject to the
followinglimits, namely:-
(a)twolakhrupees,wherethetotalamountofdeposits
ofsuchNidhifromitsmembersislessthantwocrorerupees;
(b)sevenlakhfiftythousandrupees,wherethetotalamountof
depositsofsuchNidhifromitsmembersismorethantwocrore
rupeesbutlessthantwentycrorerupees;
(c)twelvelakhrupees,wherethetotalamountofdeposits
ofsuchNidhifromitsmembersismorethantwentycrorerupees
butlessthanfiftycrorerupees;and
(d)fifteenlakhrupees,wherethetotalamountofdeposits
ofsuchNidhifromitsmembersismorethanfiftycrorerupees:
ProvidedthatwhereaNidhihasnotmade
profitscontinuouslyinthethreeprecedingfinancialyears,it
shallnotmakeanyfreshloansexceedingfiftypercent.of
themaximumamountsofloansspecifiedinclauses(a),(b),
(c)or(d).
by CS Manoj V. Ayadi

Directors
TheDirectorshallbeamemberofNidhi.
TheDirectorofaNidhishallholdofficeforatermupto
tenconsecutiveyearsontheBoardofNidhi.
TheDirectorshallbeeligibleforre-appointmentonlyafterthe
expirationoftwoyearsofceasingtobeaDirector.
ThepersontobeappointedasaDirectorshallcomplywiththe
requirementsofsubsection(4)ofsection152oftheActand
shallnothavebeendisqualifiedfromappointmentasprovided
insection164oftheAct
by CS Manoj V. Ayadi

Auditor
No Nidhi Company shall appoint or re-appoint anindividual as
auditor for more than one term of five consecutiveyears.
No Nidhi Company shall appoint or re-appoint an audit firm as
auditor for more than two terms of five consecutiveyears;
Providedthatanauditor(whetheranindividualoranaudit
firm)shallbeeligibleforsubsequentappointmentafterthe
expirationoftwoyearsfromthecompletionofhisoritsterm.
by CS Manoj V. Ayadi

Branch
ANidhimayopenbranches,onlyifithasearnednetprofitsaftertax
continuouslyduringtheprecedingthreefinancialyears.Nidhimay
openuptothreebrancheswithinthedistrict.
NoNidhishallopenbranchesorcollectioncentresorofficesor
depositcentres,orbywhatevernamecalledoutsidetheStatewhere
itsregisteredofficeissituated.
ANidhishallnotcloseanybranchunlessit:-
Publishesanadvertisementinanewspaperinvernacularlanguagein
theplacewhereitcarriesonbusinessatleastthirtydayspriortosuch
closure,informingthepublicaboutsuchclosure;
GivesanintimationtotheRegistrarwithinthirtydaysofsuch
closure.
by CS Manoj V. Ayadi

Annual NIDHI Compliance
NDH -1 :-Return of Statutory Compliances.
Withinninetydaysfromthecloseofthefirstfinancialyear
afteritsincorporationandwhereapplicable,thesecond
financialyear,Nidhishallfileareturnofstatutory
compliancesinFormNDH-1alongwithsuchfeeasprovided
inCompanies(RegistrationOfficesandFees)Rules,2014
withtheRegistrardulycertifiedbyacompanysecretaryin
practiceoracharteredaccountantinpracticeoracost
accountantinpractice.
NDH-2:-ApplytotheRegionalDirectorforextensionoftime
Withinthirtydaysfromthecloseofthefirstfinancialyear,
applytotheRegionalDirectorinFormNDH-2alongwithfee
specifiedinCompanies(RegistrationOfficesandFees)
Rules,2014forextensionoftimeandtheRegionalDirector
mayconsidertheapplicationandpassorderswithin
thirtydaysofreceiptoftheapplication.
by CS Manoj V. Ayadi

NDH -3 :-Half yearly return with the Registrar:
EveryNidhiCompanyshallfilehalfyearlyreturnwiththe
RegistrarinFormNDH-3alongwithsuchfeeasprovidedin
Companies(RegistrationOfficesandFees)Rules,2014within
thirtydaysfromtheconclusionofeachhalfyearduly
certifiedbyacompanysecretaryinpracticeorchartered
accountantinpracticeorcostaccountantinpractice.

NDH -4 :-Declaration of Nidhis:

NidhishallfileFormNDH-4withinsixtydaysfromthedateof
expiryof:-

(a)oneyearfromthedateofitsincorporationor

(b)theperioduptowhichextensionoftimehasbeen
grantedbytheRegionalDirector
by CS Manoj V. Ayadi

Consult theExperts

Completeassistanceformakingthenecessaryfilings,
applicationsetc.forobtainingMCA’sapprovaltooperate
asNidhiCompany.

UpdatingCompanyonaregularbasisastothestatusof
thependingapplication.

Toknowthefurtherdetailscontactusat
[email protected]/+919773112128
By CS Manoj V. Ayadi

by CS Manoj V. Ayadi