The Ministry of Corporate Affairs vide Nidhi (Amendment) Rules, 2022, dated 19th April, 2022, introduced substantial amendments in terms of Nidhi Rules, 2014.
The Nidhi (Amendment) Rules, 2022 has been explained in a very effortless simple terms as under.
The following clause in Rule 3A of the said rules, after the third proviso, the following fourth proviso shall be inserted, namely:-
Rule 3A fourth proviso “In simple language, as per the fourth proviso to the amendment, if any nidhi company has not complied or fails to comp https://taxguru.in/company-law/nidhi-amendment-rules-2022.html with the requirements of this rule, shall not raise any deposit from its members or provide any loan to its members under the provisions of these rules from the date of such non-compliance”
In continuation to the above amendment “if any deposit raised by a company after the date of non-compliance, or the date of commencement of the above said rules, the same shall be treated as deposits, and the requirement of deposits rules under chapter V of the Companies Act, 2013 shall apply.
Provided also that nothing in this rule shall apply to companies incorporated as Nidhi on or after the commencement of the above said rules”
After rule 3A, Rule 3B has been inserted, which explains as follows:
Public company incorporated as a Nidhi company shall within a period of 120 days (one hundred twenty days) of its incorporation in Form NDH-4, fulfils the following conditions,
(I) it has not less than two hundred members; and
(II) it has Net Owned Funds of twenty lakh rupees or more.
In Rule 4 (1) of the said rules (a) for the words “five lakh rupees”, shall be substituted by the words “ten lakh rupees” Hence now a nidhi company shall have minimum capital of Rupees 10 Lakh.
After Rule 4(1) (a), Rule 4 (1) (b) is inserted which explains that on the date of commencement of the Nidhi Amendment Rules, 2022 every Nidhi company shall comply with this requirement within a period of 18 months (eighteen months) from the date of such commencement”
As per rule 5(5), provisions of this rule shall not be applicable for the companies incorporated as Nidhi on or after the commencement of the Nidhi (Amendment) Rules, 2022”
In Rule 8 after 8(3) new sub- rule 8(4) shall be inserted which explains that, a member shall not transfer more than fifty percent of his shareholding (as on the date of availing of loan or making of deposit) during the existence of such loan or deposit, as the case may be. Provided that the member shall retain the minimum number of 10 equity shares equivalent to Rs. 100 at all times”
In Rule 9 there is substantial change in the amount of Net Owned Funds that is required to be maintained by Nidhi Company which was previously Rs. 10 Lakhs now substituted by Rs. 25 Lakhs
Honorable Ministry have taken drastic steps to make stringent Rules with respect to Nidhi Companies, so that various frauds done on behalf of nidhi companies are drastically reduced. There are many other incidental amendments to nidhi rule such as conditions to be complied for closing branches, declaration of dividend not exceeding 25% in a F.Y etc, which are not discussed here, which shall be discussed in some other article, (the nidhi amendment rules, 2022 can be found here)
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What is effective date of Nidhi(amendment) Rules 2022?
From the date of its publication in official gazette itself i.e. 19th April, 2022