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MCA amends Nidhi Rules, 2014 to safeguard the interest of general public - (20 Apr 2022)

Company

Initially, there was no requirement for a company to obtain a declaration from the Central Government in order to operate as a Nidhi Company under the Companies Act of 2013, but this has now been made mandatory. The Ministry of Corporate Affairs stated that before collecting deposits, Public Companies wishing to act as Nidhis must first get a Central Government declaration.

Any public company registered as a Nidhi company with a share capital of Rs 10 lakh will have to file a NDH-4 form and apply to the Central Government to be notified as a Nidhi company within 120 days of its incorporation. Additionally, the company must have at least 200 members and a Net Owned Fund (NOF) of Rs 20 lakh. According to the Ministry of Corporate Affairs, the promoters and directors of the company will also have to meet the fit and suitable criteria.

According to the ministry, almost 10,000 companies were incorporated between 2014 and 2019. However, just 2,300 companies filled out the NDH-4 declaration form. So, this would apply to companies incorporated after the implementation of the Nidhi (Amendment) Rules, 2022. Few necessary/important amendments in the Rules have been carried out which are applicable to the Companies to be incorporated after Nidhi (amendment) Rule, 2022, as under:-

i. A Public Company incorporated as a Nidhi with a share capital of Rs. 10 lakhs; needs to first get itself declared as a Nidhi from the Central Government by applying in form NDH-4 with a minimum membership of 200 and NOF of Rs. 20 lac within 120 days of its incorporation.

ii. The Promoters and Directors of the company have to meet the criteria of fit and proper person as laid down in the rules.

iii. For timely disposal, it has also been provided in amended Rules that in case no decision is conveyed by the Central Government within 45 days of the receipt of applications filed by companies in form NDH-4, approval would be deemed as granted. This would apply for such companies which shall be incorporated after Nidhi (Amendment) Rules, 2022.

Tags : MANDATORY   NIDHI COMPANIES   DECLARATION  

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