Introduction

Nidhi Companies are a unique form of Non-Banking Financial Companies (NBFCs) that promote savings and mutual lending among members. While any public company can register as a Nidhi, it does not automatically get recognized as one. For this, filing Form NDH-4 with the Ministry of Corporate Affairs (MCA) is mandatory. NDH-4 is the application for declaration as a Nidhi Company. If NDH-4 is not approved, the company cannot accept deposits or function as a Nidhi.

In this article, we provide a step-by-step guide on filing NDH-4, including requirements, documents, and compliance tips.

What is NDH-4?

• NDH-4 is the form prescribed under the Nidhi (Amendment) Rules, 2019.
• It is filed with MCA within 120 days of incorporation (or as per timelines notified).
• Purpose: To get recognition as a Nidhi Company from the Central Government.
• Without NDH-4 approval, even if your company has “Nidhi Limited” in its name, it cannot operate as a Nidhi.

Pre-requisites for NDH-4 Filing

Before filing NDH-4, a company must ensure:

1. Minimum Members – At least 200 members.
2. Net Owned Funds (NOF) – Minimum ₹20 lakh.
3. Unencumbered Term Deposits – At least 10% of outstanding deposits.
4. NOF to Deposit Ratio – Not more than 1:20.
5. Proper Compliance – Filing of NDH-1 and NDH-3 (if applicable) must be up to date.

Documents Required for NDH-4

Attach the following documents with NDH-4:

• List of members with details.
• Copy of resolution approving the filing.
• Certificate from practicing CA/CS/CMA regarding compliance.
• Financial statements showing Net Owned Funds.
• Details of deposits, loans, and reserves.
• Declaration by directors.

Step-by-Step Process to File NDH-4

Step 1: Prepare Member List

• Ensure a minimum of 200 members.
• Collect KYC documents (PAN, Aadhaar, Address proof) for members.
• Maintain share register to prove membership.

Step 2: Check Net Owned Funds

• Verify that the company’s Net Owned Funds (share capital + reserves – accumulated losses) are at least ₹20 lakh.
• Get the figure certified by a professional.

Step 3: Maintain Deposit Ratio

• Ensure that the company maintains the required 1:20 ratio between Net Owned Funds and deposits.
• Keep 10% unencumbered term deposit in a scheduled bank.

Step 4: Draft Board Resolution

• Conduct a board meeting and pass a resolution to approve filing NDH-4.
• Authorize a director or company secretary to digitally sign the form.

Step 5: Fill NDH-4 on MCA Portal

• Log in to the MCA V3 Portal.
• Select NDH-4 form under e-Forms.
• Fill details such as:
  • CIN of the company.
  • Date of incorporation.
  • Number of members.
  • Deposits accepted.
  • Net Owned Funds.
  • Ratio of NOF to deposits.

Step 6: Attach Supporting Documents

• Upload member list, financial statements, compliance certificate, and board resolution.
• Ensure all attachments are in PDF format and digitally signed.

Step 7: Professional Certification

• NDH-4 must be certified by a practicing CA, CS, or CMA.
• Professional must verify compliance and correctness.

Step 8: Pay Fees and Submit

• Pay filing fees online (usually ₹2,000 to ₹10,000, depending on authorized capital).
• Submit the form through MCA portal.

Step 9: Scrutiny by MCA

• MCA scrutinizes the application and may raise queries.
• Company must respond within the given timeline.

Step 10: Approval or Rejection

• If approved → Company officially becomes a recognized Nidhi Company.
• If rejected → The company cannot function as a Nidhi and must change business model or reapply.

Common Mistakes to Avoid

• Filing without 200 members.
• Not maintaining ₹20 lakh Net Owned Funds.
• Incorrect or incomplete attachments.
• Delayed filing beyond 120 days.
• Ignoring MCA queries.

FAQs on NDH-4 Filing

Q1. Is NDH-4 mandatory for all companies with “Nidhi” in their name?
Yes. Without NDH-4 approval, they cannot operate as Nidhis.

Q2. Can NDH-4 be filed after 120 days?
Late filing is generally not permitted, but the MCA may allow in specific cases with penalties.

Q3. What happens if NDH-4 is rejected?
The company cannot raise deposits or provide loans. It must either correct compliance and reapply or alter its name and objects.

Q4. How long does NDH-4 approval take?
Normally 30–60 days, depending on MCA scrutiny.

Q5. Who can sign NDH-4?
A director authorized by the board must digitally sign, and a practicing professional (CA/CS/CMA) must certify.

Conclusion

NDH-4 is the most critical form in the life of a Nidhi Company. Without approval of NDH-4, the company cannot accept deposits or be recognized as a Nidhi. Directors must ensure that all compliance requirements — especially 200 members, ₹20 lakh Net Owned Funds, and proper ratios — are fulfilled before filing.