Winding Up Of Nidhi Company

Nidhi company registration is the process of incorporating a type of NBFC called Nidhi.This NBFC is also known as Mutual Benefit Finance Company. Starting a Nidhi company is one of the best options for people who want to commence a finance business with low capital investment.

Why to close a Nidhi Company?

If you are not running a company and not even complying with the law then you can file Nidhi Limited Company closure to avoid being in default. A dummy company, defunct company, non-operative companies can file for Company closure to avoid late penalties etc.

Closing of a Nidhi Company is generally known as Strike off or company closure. Company closure is defined under newly notified rules Companies (Removal of Names of Companies) Rules, 2016 which are governed by section 248 of Companies Act, 2013. If you are not doing any business activity and not even doing Compliance as required under the law, we suggest you to close your Nidhi Company.

Documents Required for Nidhi Company Closure

Mandatory Documents
- Indemnity Bond notarized by Directors (STK 3)
- Statement of Accounts latest
- Statement of Accounts containing assets & liabilities of the Company Audited by CA
- Affidavit in Form STK 4 by every Company
- Special Resolution or Consent of 75% Members

Optional Documents (If applicable)
- Bank Account Closure Certificates
- PAN Card of the Company

Closure of Nidhi Company Branch:

A Nidhi shall not close any branch unless:

It publishes an advertisement in a newspaper in vernacular language in the place where it carries on business at least 30 days prior to such closure.

Informing the public about such closure; fixes a copy of such advertisement or a notice informing such closure of the branch on the notice board of Nidhi for a period of at least 30 days from the date on which advertisement was published.

Gives intimation to the Registrar within 30 days of such closure.

1. An application for removal of name of the company under sub-section (2) of section 248 shall be made in Form STK-2 along with the fee of five thousand rupees (Note-1).

2. Every application under sub-rule (1) shall accompany a NOC from appropriate Regulatory Authority concerned.

3. The application in Form STK 2 shall be accompanied by –
I. Indemnity bond duly notarized by every director in Form STK 3;
II. A statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant (Note-2);
III. An affidavit in Form STK 4 by every director of the company;
IV. A copy of the special resolution duly certified by each of the directors of the company or consent of seventy five per cent of the members of the company in terms of paid up share capital as on the date of application;
V. A statement regarding pending litigations, if any, involving the company.

Nidhi Company Returns:

Within 90 days from the closure of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH – 1 along with such fee as prescribed with the Registrar duly certified by a Company Secretary in practice or a Chartered Accountant in practice or a Cost Accountant in practice.

If the company is not complying with the above it shall within90 days from the close of the first financial year, apply to the Regional Director in Form NDH -2 along with fee for extension of time.

Restriction on Nidhi Company:

Due to restriction, some Nidhi owners unable to run the company effortlessly. Below we have mentioned some restrictions that you should know before incorporating nidhi company.

A Nidhi is restricted from undertaking any of the exercises expressed below;

• To attempt the matter of chit funds, hire purchase, renting money, insurance or procurement of securities.

• To issue preference shares or debentures.

• To open the current account of the member.

• To accept deposit or loan cash to any individual other than its individuals.

• To issue any sort of advertisement.

• To go into any understanding or pay financier to request any sort of deposits.

• Pledging any of the advantages put together by its very own individuals as security.

• Pay any brokerage or incentives for mobilizing deposits from members or for granting loans.

• Charge rates of interest exceeding 7.5% respectively.

• Not declare dividend exceeding twenty-five percent.

• Enter into a partnership of borrowing money and securities.