Nidhi Company Annual Compliance

A Nidhi Company, also known as Mutual Benefit Finance Company, is one of the types of a Non-Banking Financial Company. Nidhi Company is the best choice for a person who wants to carry a lending business with low investment.

Nidhi Company needs to comply with the Nidhi Company Annual compliance. Nidhi Rules 2014 and The Companies Act 2013 contain the statutory compliance for Nidhi Companies.

What is the requirement of Compliances?

Compliances are essential to obtain true insights about the performance of the Company.

All companies registered under The Companies Act 2013 are required to file the prescribed compliances. Moreover, Nidhi Company is a public company and it needs to safeguard the interest of its stakeholders, so it is mandatory to follow the compliances.

Compliances for Nidhi Company are divided into two categories in India:

  • One-time compliances
  • Annual compliances

What are the One-Time Compliances for Nidhi Company?

The compliance which is required to be followed only at the time of registration of business entity is known as One-time Compliance. These compliances are non-recurring in nature that means they are not required to be filed repeatedly.

Following is the list of one-time compliances for Nidhi Company:

  • Any change in the Company's name
  • Filing /Any change in the registered office's address
  • Filing /Any amendment in Company's Objects
  • Changes in the Company's capital structure
  • Director's Appointment
  • Auditor's Appointment
  • Directo's Resignation
  • Auditor's Resignation

What are the Annual Compliances for Nidhi Company?

Annual compliances are recurring in nature. In other words, these need to be filed after regular intervals of time where most of these are presented annually.

These compliances give information about the status and performance of Nidhi Company during a financial period.

A Nidhi Company is obliged to meet the mentioned compliances in the Companies Act 2013 as well as in Nidhi Rules 2014.

Following is the list of annual compliances for Nidhi Company:

i. NDH 1

A Nidhi Company must file NDH-1 along with the prescribed fees. Also, it needs to be duly certified by a practicing Company Secretary or Chartered Accountant or Cost Accountant.

This return must be filled within 90 days, which is counted from the last date of the first or second financial year (whichever applicable) after the incorporation of the company.

ii. NDH 2

A Nidhi Company is obligated to file form NDH-2 along with mentioned fees. In case, the company fails to meet the compliances mentioned below, then this form is to be submitted with the Regional Director for the extension of time.

  1. Failing to add 200 members in a financial year
  2. Unable to maintain 1:20 as the ratio of net owned funds to deposit.

Now the Regional Director may accept and give orders within 30 days from the date of arrival of application.

iii. NDH - 3

Nidhi Company is obliged to file NDH 3 that is a half-yearly return.

iv. Maintenance of Books of Accounts

Every Nidhi company must ensure maintenance of books of accounts on time.

v. Maintenance of Statutory Registers

Maintenance of statutory registers is one of the essential compliances for a Nidhi company as per the Companies Act 2013.

vi. Convene Statutory Meetings

It is compulsory for every Nidhi Company to have meetings of Board of Directors and meetings of Shareholders.

vii. Preparation of Financial Statements

A Nidhi Company is obligated to prepare financial statements. Financial statements comprises of Balance Sheet (B.S.), Profit & Loss Account (P&L) and Cash Flow Statement (CFS)

viii. Filing of Income Tax Returns

A Nidhi Company is required to file annual income tax returns by September 30 of the next financial year.

ix. Financial Statement Returns Filing

The form AOC-4 is filled with the information of the financial statements of the Company. Along with the form, other documents are uploaded as prescribed.

x. Filing of Annual Return (MGT-7 -ROC Annual Returns)

Nidhi Bank is obligated to file the Annual Return with the Ministry of Corporate Affairs through Form MGT-7.

What are the Penalties for a defaulter?

Filing of compliances in given time is compulsory for every Nidhi company. Nidhi Bank Operators can attract penalty for not doing the same on time.

If the Entity fails to file the compliance, the Company with concerned officers to it will be fined up to the limit of INR 5000.

In case the default continues, the further fine will be INR 500 every day.

What are the Important Dates one should know?

In order to dodge the penalties, one should file compliances within the prescribed time. For a Nidhi Company, following are the due dates for filing compliance:

Compliance Due Date
AGM (Annual General Meeting) September 30
AOC-4 Within 30 days of Annual General Meeting
MGT-7 Within 60 days of Annual General Meeting
NDH 1 Within 90 days of Financial Year
NDH 3 Half yearly
Income Tax Return September 30