Government cautions stakeholders as 348 companies fail to meet requisite criteria for declaration as Nidhi company

Last updated: 02 September 2021

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The government has issued a caution to stakeholders as 348 companies have failed to meet the necessary criteria to be declared as Nidhi companies under the Companies Act 2013 and Nidhi Rules 2014. Despite applications being submitted, none of the scrutinised forms met the requirements for Central Government declaration. The government also noted that many companies operating as Nidhi companies have not yet applied for this declaration, which is a violation of current regulations. Stakeholders are strongly advised to verify a company's Nidhi status and its official declaration by the Central Government before becoming a member or investing funds.

Government cautions stakeholders as 348 companies fail to meet requisite criteria for declaration as Nidhi company under Companies Act 2013 and Nidhi Rules 2014

Under section 406 of the Companies Act, 2013 (CA, 2013) and Nidhi Rules, 2014 (as amended), companies incorporated as Nidhi Companies need to apply to the Central Government in form NDH-4 for declaration as a Nidhi Company.

348 Firms Fail Nidhi Company Criteria: Govt Warning

It has been observed that companies have been applying to the Central Government for declaration as Nidhi under the CA, 2013 but of the 348 number of forms scrutinized upto 24.08.2021 not a single company could satisfy the requisite criteria for it to be declared as a Nidhi Company by the Central Government. There are large number of companies which though functioning as Nidhi Company have not yet applied to the Central Government for declaration as Nidhi Company which is violation of the CA, 2013 and Nidhi Rules, 2014.

Stakeholders are advised to verify the antecedents of the company functioning as a Nidhi company and ensure that the company has been declared as a Nidhi Company by the Central Government before becoming its member and depositing / investing their hard-earned money in such companies.

FAQ :

As of 24.08.2021, 348 companies failed to meet the requisite criteria for declaration as a Nidhi company.

Companies incorporated as Nidhi Companies need to apply to the Central Government in form NDH-4 for declaration as a Nidhi Company under the Companies Act, 2013 and Nidhi Rules, 2014.

Based on the scrutiny of 348 forms up to 24.08.2021, not a single company satisfied the criteria for declaration as a Nidhi Company by the Central Government.

This is a violation of the Companies Act, 2013 and Nidhi Rules, 2014.

Stakeholders are advised to verify the antecedents of the company and ensure it has been officially declared as a Nidhi Company by the Central Government.

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