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Central Government has recently amended the provisions related to NIDHI under the Companies Act and the Rules (effective from 15.08.2019).

Why amended:

• to make regulatory regime for Nidhi Companies more effective and
• also to accomplish the objectives of transparency &
• investor friendliness in corporate environment of the country.

MCA Amends Provisions related to NIDHI Companies

Define Nidhi:(Under Nidhi Rules)

Nidhi is a company which has been incorporated as a Nidhi with the object of :

• cultivating the habit of thrift and
• saving amongst its members,
• receiving deposits from,
• and lending to, its members only, for their mutual benefit


Changes via this amendment:

1. Declaration in form NDH-4

The amended provisions of the Companies Act (Section 406) and Nidhi rules (as amended w.e.f. 15.08.2019) require that the Nidhi companies have to apply to the Central government for updation of their status/ declaration as Nidhi Company in Form NDH-4.

2. The time-frame for applying to Central Government in form NDH-4 is as under:-

i) Companies incorporated as Nidhi before Nidhi Amendment Rules, 2019 i.e. 15.08.2019 have to apply within a period of one year from the date of its incorporation or within 9 months of the Nidhi Amendment Rules i.e. 15.08.2019 whichever is later.

ii) Companies incorporated as Nidhi on or after Nidhi Amendment Rules, 2019 i.e. 15.08.2019 have to apply within 60 days of expiry of one year from the date of incorporation or extended period (as granted by concerned Regional Director).’


3. Consequences of Non – filing :

The Company shall not be allowed to file :

  • Form No. SH–7 (Notice to Registrar for any alteration of share capital) &
  • Form PAS–3 (Return of Allotment).

4. In case of contravention of the provisions:

the company and every officer of the company who is in default shall initially be punishable with fine which may extend to five thousand rupees and further fine in case of continuous violations.

5. Investor Alerts :

Investors are advised to verify the status of Nidhi company from the notification issued by Central Government in official gazette before making any investment or deposit

Read full notification / gazette with formats at :


Published by

CS Lalit Rajput
(Company Secretary)
Category Corporate Law   Report

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