Nidhi Company

Nidhi Company is the most popular system for providing loans and to accept deposits from its members. It is also called mutual benefit Company. Nidhi Company will always be public limited company and its name should end with ‘Nidhi Limited”.

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The objective of Nidhi company is cultivating the habit of thrift and savings amongst the members, receiving deposits from, and lending to its members only.
The company is not allowed to raise deposits from its members/ provide any loan to its members without obtaining approval NDH-4 (Declaration as Nidhi company).

Procedure for Incorporation

  • Incorporate a public company
  • Within 120 days from its incorporation, File a form NDH-4 for incorporation as Nidhi company.
  • Before filing form NDH-4 ensure that the following requirements are met:
    1. It has not less than 200 members
    2. It has net owned funds of Rs. 20 lakhs or more
  • Attach declaration along with Form NDH-4 regarding fulfillment of ‘Fit and proper Person’ criteria by all the directors and promoters of the company

Fit and proper person declaration

The following shall be taken into account for determining the ‘Fit and proper Person’ criteria in respect of the directors and the promoters –

  • Reputation, integrity, ethical behavior, character, fairness and honesty of the person; and
  • The person should not be fall under any of the following disqualifications –
    • Any criminal complaint/ information, under section 154 of the Code of Criminal Procedure, is filed and pending against such person by the person authorized by the Central Government; or
    • A charge sheet is filed and pending against such person by any enforcement agency in any matter relating to economic offences; or
    • An order of restraint/ prohibition/ debarment is passed against such person by any regulatory authority/ enforcement agency in any matter relating to company law or securities law or financial markets; or
    • An order of conviction is passed against such a person by a court for an offence relating to moral turpitude; or
    • The person is declared insolvent and not yet discharged; or
    • The court of competent jurisdiction has found the person to be of unsound mind and such finding is still in force; or
    • The person is categorized as a willful defaulter; or
    • The person is declared as a fugitive economic offender; or
    • The person is the director in five or more companies or the person is the promoter of three or more companies that are incorporated or declared as Nidhi.

Once the public company files the application in Form NDH-4, the same will be processed as under

  • The Central Government will go through and examine the application;
  • The Central Government will convey the decision, about accepting or rejecting the application, within a period of 45 days to the company. Notably, if the decision is not conveyed within 45 days, it will be deemed that the application is approved;
  • On approving the application, the company needs to file the approving decision of the Central Government along with Form 20A with the Registrar;
  • The Central Government, on being satisfied, will notify in the official Gazette declaring the company as a Nidhi or Mutual Benefit Society.

Setting up business

Private Limited company
Proprietorship
DIN
PAN
EPF

ROC Compliance

LLP ROC Compliance
OPC ROC Compliance
Company ROC Compliance
Closure of Private company
Closure of LLP

Direct tax compliance

Filing income tax returns
Chapter VIA deductions
Capital gains taxation
Taxation of business
NRI income

Indirect tax compliance

GST returns and due dates
Input tax credit claim
GST Refund
GST TCS
GST TDS

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