On April 19, 2022, the Ministry of Corporate Affairs has notified Nidhi (Amendment) Rules, 2022 to amend the Nidhi Rules, 2014.
Key points:
- In rule 3A dealing with declaration of Nidhis, the following provisos shall be inserted:
“Provided also that no company, which has not complied with the requirements of this rule, or fails to comply with such requirement on or after the commencement of the Nidhi (Amendment) Rules, 2022, or in case the application submitted by the company in Form NDH–4 is or has been rejected by the Central Government, shall raise any deposit from its members or provide any loan to its members under the provisions of these rules from the date of such non–compliance, or from the date of the commencement of the above said rules, or the date of rejection of the application in Form NDH–4, whichever is later.
Provided also that if any deposit raised by a company after the date of non-compliance, or the date of commencement of the above said rules, or the date of rejection of the application in Form NDH-4, whichever is later as referred to in the fourth proviso shall be deemed to have been raised in pursuance of Chapter V of the Act, and shall be subject to all the requirements under that Chapter, or under any other provisions of the Act or the rules made thereunder, as the case may be.
Provided also that nothing in this rule shall apply to companies incorporated as Nidhi on or after the commencement of the above said rules.”
- Rule 3B dealing with public company desirous to be declared as a Nidhi has been inserted:–
(1) On and after commencement of Nidhi (Amendment) Rules, 2022, public company desirous to be declared as a Nidhi shall apply, in Form NDH–4, within a period of one hundred twenty days of its incorporation for declaration as Nidhi, if it has not less than two hundred members and has Net Owned Funds of twenty lakh rupees or more.
(2) The company shall also attach, alongwith Form NDH-4, the declaration with regard to fulfilment of fit and proper person criteria, as per this sub-rule, by all the promoters and directors of the company.
(3) For the purpose of determining as to whether any promoter or director is a ‘fit and proper person’, the integrity, honesty, ethical behaviour, reputation, fairness and character of the person; and the person not incurring any of the disqualifications shall be taken into account.
(4) The Central Government, shall examine the application filed in Form NDH-4 and convey its decision within a period of forty five days to the company: Provided that in case a decision on an application filed in form NDH-4 is not taken by the Central Government within the aforesaid period of receipt of such application, the same shall be deemed as approved.
(5) On being satisfied that the company meets the requirements under sub- rules (2) and (3), the Central Government, shall notify in the Official Gazette, declaring it as a Nidhi or Mutual Benefit Society, as the case may be: Provided that the decision of the Central Government approving the application, shall be filed by the company with the Registrar alongwith Form 20A required under section 10A of the Act:
Provided further that such company shall commence its business only once the decision of the Central Government approving its application is obtained from the Central Government pursuant to the declaration given under rule 12 of the Companies (Incorporation) Rules, 2014.
(6) In case a company does not comply with the requirements of sub- rule (1) of this rule, it shall not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of allotment).
- Rule 4 has been modified to increase the minimum paid up equity share capital from five lakh rupees to ten lakh rupees. The amendment also inserts a proviso:
“Provided that every Nidhi existing as on the date of commencement of the Nidhi Amendment Rules,2022, shall comply with this requirement within a period of eighteen months from the date of such commencement”.
- In rule 8 relating to Membership, the following sub–rule shall be inserted:
“(4) A member shall not transfer more than fifty percent of his shareholding (as on the date of availing of loan or making of deposit) during the subsistence of such loan or deposit, as the case may be.
Provided that the member shall retain the minimum number of shares required under sub- rule (3) of rule 7 at all times”.
- In rule 23A relating to Compliance with Rule 3-A by certain Nidhis, after the first proviso, the following provisos shall be inserted:
“Provided further that no company which has not complied with the requirements of this rule, or fails to comply with such requirement on or after the date of commencement of the Nidhi (Amendment) Rules,2022, or in case the application submitted by the company in Form NDH-4 is or has been rejected by the Central Government, shall raise any deposit from its members or provide any loan to its members under the provisions of these rules from the date of such non-compliance, or the date of commencement of the said rules, or the date of rejection of the application in Form NDH-4, whichever is later.
Provided also that any deposit raised by a company after the date of non-compliance, or the date of commencement of the above said rules, or the date of rejection of the application in Form NDH-4, whichever is later, as referred to in the second proviso shall be deemed to have been raised in pursuance of Chapter V of the Act, and shall be subject to all the requirements under that Chapter, or under any other provisions of the Act or the rules made thereunder, as the case may be.
