The Government has now made it mandatory for Nidhi companies to inform the authority about the change in control of the organization. This is part of the additional disclosers required by these companies. Other required information includes details of collection centers and details of earnings.
These changes have been incorporated into the revised forms NDH-1 (statement of statutory compliance), NDH-2 (request to the Regional Director and summons to the Registrar), NDH-3 (statement of completed semester) and NDH-4 (form for the filing of the declaration request as a Nidhi company and for the status update by Nidhis). With the issuance of a notification, the new forms have become effective as of January 23.
Information related to the extension
“Has the company acquired another company through the purchase of securities or controlled the composition of the Board of Directors of any other company in any way or entered into any agreement for the change of its management?”, one of the key additions in the NDH form -4 readings. Another provision is related to information related to the extension.
Explaining the changes, Moin Ladha, a partner at Khaitan & Co, said that through the amendments, the MCA has updated the form submissions that a Nidhi company has to make. The NDH-1 form was amended to add details of whether a request was made to the regional director in relation to the extension of time in respect of maintaining the ratio of net own funds to deposits.
Scope of Revised Forms
The scope of the revised forms has been expanded to include confirmations regarding other extensions, if any are obtained. Details such as the branch closing date, the branch opening date, the proposed branch closing date, and the collection centers closing date must be provided. “In addition, the details of the collection centers and the details of the earnings will also be incorporated. Lastly, confirmation regarding any change of control or acquisition is now necessary,” he said.
The changes to the forms are a major development after Nidhi’s rule amendments last April. It was prescribed that a public company incorporated as Nidhi with a registered capital of ₹10 lakh, must first declare itself as central government Nidhi by applying on form NDH-4 with a minimum membership of 200 and NOF of ₹20 lakh within the 120 days of its incorporation.
Fit criteria
The Promoters and Directors of the company must meet the suitability criteria established in the regulations. For timely provision, it was also provided in the amended rules that in case the central government does not transmit a decision within 45 days after receiving the applications submitted by the companies in the NDH-4 form, the approval will be will consider granted. This would apply to companies to be incorporated after the Nidhi (Amendment) Rules, 2022.
Explaining the reason behind the rule changes, the government had said that under the Companies Act 1956, some 390 companies were declared as Nidhi companies only. During 2014-2019, more than ten thousand companies are incorporated. However, only about 2,300 companies have requested the declaration on the NDH-4 form.
