Section 406 Nidhi Form No.26.1 & 26.3 to be certified by COST ACCOUNTANT

The Companies Act 2013 –

406. Power to modify Act in its application to Nidhis

406. (1) In this section, “Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with such rules as are prescribed by the Central Government for regulation of such class of companies.

(2) Save as otherwise expressly provided, the Central Government may, by notification, direct that any of the

provisions of this Act shall not apply, or shall apply with such exceptions, modifications and adaptations as may be specified in that notification, to any Nidhi or Nidhis of any class or description as may be specified in that notification.

(3) A copy of every notification proposed to be issued under sub-section (2), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses.

Draft Rules under Companies Act, 2013

Nidhis

In exercise of the powers conferred under sub-section (1) of section 406 read with sub-sections (1) and (2) of 469 of the Companies Act, 2013, the Central Government hereby makes the following rules, namely:-

1. These Rules may be called Nidhi Rules, 2013.

2. They shall come into force on the date of their publication in the Official Gazette.

3. These rules shall apply to:

(a) Every company which had been declared as a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956.

(b) Every company functioning on the lines of a Nidhi company or Mutual Benefit Society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under sub-section (1) of section 620A of the Companies Act, 1956.

(c) Every company incorporated as a Nidhi pursuant to the provisions of section 406 of the Act (hereinafter referred to as Nidhi).

6. (i) Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has:

(a) Not less than two hundred members

(b) Net Owned Funds of ten lakh rupees or more.

(c) Unencumbered Term Deposits of not less than ten per cent. of the outstanding deposits as specified in rule 15.

(d) Ratio of Net Owned Funds to Deposits of not more than 1:20.

(ii) Within 90 days from the close of the first financial year after its incorporation and where applicable, the second financial year, the Nidhi shall file a Return of statutory compliances in Form No. 26.1 along with such fee as provided in Annexure ‘B’ with the Registrar duly certified by a company secretary in practice or chartered accountant or cost accountant.

22. Every company covered under rule 3 shall file half yearly return with the Registrar in Form No. 26.3 along with such fee as provided in Annexure ‘B’ within 30 days from the conclusion of each half year duly certified by a Company Secretary in practice/Chartered Accountant/Cost Accountant without filing fees.

24. Power to enforce compliance

(i) For the purposes of enforcing compliance with the Rules prescribed under this Chapter, the Registrar of Companies may call for such information or returns from the Nidhi as he deems necessary and may engage the services of chartered accountants, company secretaries in practice, cost accountants, or any firm thereof from time to time for assisting him in the discharge of his duties.