Introduction

Nidhi Companies in India are governed by the Companies Act, 2013 and the Nidhi Rules, 2014, with specific forms prescribed by the Ministry of Corporate Affairs (MCA). These forms ensure transparency, compliance, and monitoring of Nidhi operations. Every director or professional handling Nidhi Company compliance must be aware of four critical forms – NDH-1, NDH-2, NDH-3, and NDH-4. Each serves a different purpose, ranging from reporting compliance to seeking government approval for Nidhi status. In this article, we will explore these forms in detail, including purpose, due date, filing process, penalties, and practical tips.

1. NDH-1 – Return of Statutory Compliance

Purpose:
Form NDH-1 is a return of statutory compliances filed by every Nidhi Company within 90 days from the close of the first financial year after incorporation (and if applicable, the second financial year).

Contents:

• Number of members.
• Net owned funds.
• Deposits accepted.
• Loans disbursed.
• Ratio of Net Owned Funds to Deposits.

Due Date:

• Within 90 days of the close of the financial year.

Certification:

• Must be certified by a practicing CA, CS, or CMA.

Importance:

• NDH-1 ensures that the Nidhi is on track with the minimum requirements:
  • 200 members,
  • Net Owned Funds of ₹10 lakh or more,
  • 10% unencumbered term deposits,
  • NOF to Deposit ratio not exceeding 1:20.

2. NDH-2 – Application for Extension

Purpose:
If a Nidhi Company cannot meet the above conditions (200 members or NOF ratio) within one year, it must apply for an extension by filing NDH-2.

Authority:

• Filed with the Regional Director (RD).

Due Date:

• Within 30 days from the close of the first financial year.

Outcome:

• RD may grant an extension of up to one more year.

Importance:

• Without filing NDH-2, the Nidhi Company cannot legally accept deposits or continue business operations.

3. NDH-3 – Half-Yearly Return

Purpose:
Form NDH-3 is a half-yearly return that captures details of members, deposits, loans, reserves, and other compliance aspects.

Due Dates:

• For the period ending 30th September → file by 30th October.
• For the period ending 31st March → file by 30th April.

Certification:

• Must be certified by a practicing CA, CS, or CMA.

Contents:

• Total members admitted and ceased.
• Loans and deposits details.
• Default, if any.
• Ratio maintenance.

Importance:

• NDH-3 acts as a compliance health check every 6 months.

4. NDH-4 – Application for Declaration as Nidhi Company

Purpose:
NDH-4 is the most important form because it is used to apply for recognition as a Nidhi Company from the Central Government.

Applicability:

• Companies incorporated as “Nidhi Limited” must file this form within 120 days of incorporation.

Requirements:

• Minimum 200 members.
• Net Owned Funds of ₹20 lakh (as per amended rules).
• Compliance with all Nidhi Rules, 2014.

Outcome:

• If approved, the company is declared as a Nidhi Company.
• If rejected, the company cannot raise deposits or provide loans.

Recent Amendments (2022):

• Stricter scrutiny.
• Companies failing NDH-4 approval cannot function as Nidhi Companies.

Penalties for Non-Compliance

• Failure to file NDH forms can attract monetary penalties under the Companies Act, 2013.
• MCA may also restrict the company from accepting deposits or lending.
• Directors may face personal liability in case of repeated violations.

Practical Tips for Directors and Professionals

1. Maintain records in advance – Keep member registers, deposit ledgers, and loan files updated.
2. Set compliance reminders – Due dates for NDH-1, 2, 3, and 4 are strict.
3. Hire professionals – Ensure filings are certified by CA/CS/CMA.
4. Watch out for amendments – MCA frequently updates rules for Nidhi Companies.
5. Avoid defaults – Non-filing may lead to MCA rejecting NDH-4 and penalizing the company.

Conclusion

NDH-1, NDH-2, NDH-3, and NDH-4 are the cornerstone compliance forms for Nidhi Companies in India. While NDH-1 and NDH-3 deal with reporting compliance, NDH-2 and NDH-4 are critical for securing recognition and extensions. Directors must prioritize these filings because MCA has been strict in monitoring Nidhi Companies in recent years. Non-compliance can lead not only to penalties but also to restrictions on deposits and loans – the very essence of a Nidhi Company.

Additional FAQs on NDH Forms

Q4. Who can certify NDH-1 and NDH-3 forms?
Both NDH-1 and NDH-3 must be certified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA).

Q5. Is NDH-4 a one-time filing?
Yes, NDH-4 is filed only once — within 120 days of incorporation — to obtain government approval as a Nidhi Company.

Q6. What happens if NDH-4 is rejected?
If NDH-4 is rejected, the company cannot function as a Nidhi Company, cannot raise deposits, and cannot provide loans to members. It must either reapply after rectification or change its business structure.

Q7. Can NDH-2 extension be sought more than once?
No, NDH-2 can only be used to seek an extension of one year beyond the first financial year. If compliance is still not achieved, the company will lose Nidhi status.

Q8. What are the government fees for filing NDH forms?
The government fees vary depending on the company’s authorized share capital, typically ranging from ₹200 to ₹600 per form.

Q9. Is there an additional fee or penalty for late filing of NDH forms?
Yes, MCA levies additional fees for every delayed day of filing. Continuous non-filing may attract penalties under Section 450 of the Companies Act, 2013.

Q10. Do Nidhi Companies also need to file ROC annual returns apart from NDH forms?
Yes. Nidhi Companies must file annual returns (MGT-7A), financial statements (AOC-4), and auditor appointment forms (ADT-1) in addition to NDH compliance.

Q11. Can NDH-3 be filed online without professional help?
Technically yes, but since it requires professional certification (CA/CS/CMA), most companies engage professionals for accuracy and legal compliance.

Q12. Is NDH-1 applicable every year?
No, NDH-1 is filed only within 90 days of the close of the first (and if applicable, the second) financial year of incorporation.

Q13. Can a company continue to use “Nidhi Limited” in its name if NDH-4 is rejected?
No. If NDH-4 is rejected, the company must change its name and remove “Nidhi Limited.”

Q14. What are the common reasons for NDH-4 rejection?

• Not meeting minimum 200 members.
• Net Owned Funds less than ₹20 lakh.
• Improper ratio of Net Owned Funds to deposits.
• Non-submission of proper attachments and declarations.

Q15. Is there a difference between NDH-3 filing for small and large Nidhi Companies?
No, NDH-3 requirements are uniform for all Nidhi Companies irrespective of size, though the scale of deposits and members reported will differ.