Under the Companies Act, 1956, Nidhi or Mutual Benefit Society referred to a company that the Central Government had declared as Nidhi or Mutual Benefit Society by notice in the official gazette. Under the Companies Act, 2013, initially there was no need for a company to receive an announcement from the Central Government to operate as a Nidhi Company. Such companies were required to participate only as Nidhi and meet the requirements under sub-rule (1) of regulation 5 of Nidhi rules namely, a minimum of 200 members, the Net Owned Fund (NoF) of Rs. 10 lakh, NOF deposit rate of 20:20 and deposit of 10% of the non-deductible deposit at schedule commercial banks or post offices within one year of the commencement of Nidhi Regulations, 2014.
Committee recommendations on matters arising from the Companies Act, 2013
A committee was established in the Department to make recommendations on matters arising from the implementation of the Companies Act, 2013 etc. and it was, inter alia, that the previous provisions under the Companies Act, 1956 required the approval of the Central Organization. The government in order to be declared Nidhi was competent as it provided a more centralized and regulatory framework for such businesses and as a result section 406 of the Companies Act, 2013 was amended from 15.08.2019 to reinstate the requirement as Nidhi. by the Central Government.
Amendment of the Companies Act, 2013
Following an amendment to the Companies Act, 2013 w.e.f. 15.08.2019 and the resulting amendments to Nidhi Rules, 2014 w.e.f. 15.08.2019, companies affiliated as Nidhis were required to apply to the Central Government on the NDH-4 Form to issue a declaration within 14 months of the merger, if filed after the commencement of the Nidhi Act (Amendment) w.e.f 15.08.2019 and between 09 months of commencement of Nidhi Laws (Amendment) w.e.f 15.08.2019, if compiled as Nidis after 2014 but before 15.08.2019.
Under the Companies Act, 1956, approximately 390 companies were declared as Nidi companies only. Between 2014-2019, more than ten thousand companies are included. However, only about 2,300 companies applied for the NDH-4 form. It has been noted in the review of form NDH-4 that companies have previously not complied with applicable provisions of the Law and the Nidhi Rules, 2014 (as amended).
Important amendments
To protect the interests of the general public, it is imperative that before becoming a member, a person must verify a company declaration as a Nidhi by the Central Government and in this case, a few necessary / important amendments to the rules have been made. operating in Companies to be incorporated after the Nidhi Act (amendment), 2022, as A Public Company incorporated as Nidhi with a budget of Rs. 10 lakh; requires it to first be declared a Nidhi from the Central Government by applying on the NDH-4 form with a minimum membership of 200 and a NOF of Rs. 20 lacs within 120 days of its compilation submitted by the Central Government within 45 days of receipt of applications lodged by companies on the NDH-4 form, authorization will be deemed to have been approved. This will apply to such companies that will be incorporated under the Nidhi (Amendment) Act, 2022.
