MCA Tightens Rules for Nidhi Cos

The ministry of corporate affairs (MCA) has said that any public company incorporated as’ nidhi with a share capital of 10 lakhs must submit form NDH-4 to the central government within 120 days of incorporation to be noticed as a nidhi ‘company. the move is aimed at safeguarding the interest of the general public. Such entities also need to have at least 200 members and should have a net owned fund (NOF) of 20 lakhs the, MCA said in a press release issued on Tuesday, adding that the promoters and directors of the company will have to satisfy the ‘fit’ ands ‘proper’ criteria. Until now, to obtain consent from the central government to operate as a ‘nidhi’ company, such entities had to apply within 14 months from their incorporation. The development comes amid a sharp rise in the number of ‘nidhi’ companies. Under the told Companies Act (1956), there were only 390 ‘nidhi’ companies. However, the count stared to go up after the new Companies Act, 2013 came in to effect from April 2014. Just about 390 companies were declared as ‘nidhi’ under the Companies Act, 1956. The count has surged since the implementation of the Companies Act, 2013. However, The MCA has observed that several companies are not complying with the required NDH-4 from submission rule. According to the ministry, in the period between 2014 and 2019, more than 10,000 new companies were incorporated. However, only 2,300 of them summited the NDH-4 from.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *