NDH-4 for a Nidhi Company: Steps and Rejection Reasons

NDH-4 for a Nidhi company is the application that decides whether you can actually start taking deposits and lending to members. You incorporate first, then ask the Central Government to declare the company a Nidhi. Miss the filing window or the conditions, and the company is stuck. Here is how the filing works and where applications go wrong.

In this guide

• What NDH-4 is
• Conditions on the application
• Steps to file NDH-4
• Why NDH-4 gets stuck or rejected
• If you cannot meet the conditions in time
• After the declaration
• FAQs

What NDH-4 is

A company incorporated as a Nidhi under the Nidhi Rules, 2014 must apply for a declaration by the Central Government that it is a Nidhi. The form for that is NDH-4. Since the 2022 amendment (Rule 3B), the application goes in within 120 days of incorporation.

This declaration is the thing people loosely call a Nidhi “licence”. There is no RBI licence for a Nidhi. If the company does not get the declaration, or it is rejected, it cannot take deposits from or lend to members.

Conditions on the application

Condition	What the Rules ask
Time limit	Within 120 days of incorporation
Members	At least 200
Net owned funds (NOF)	At least Rs 20 lakh (earlier Rs 10 lakh)
Promoters and directors	Must meet “fit and proper” criteria
Decision time	45 days, and deemed approved if no decision

These are per the Rules as we read them, so check the current text and the form on the MCA portal. For how NOF is worked out, see our post on net owned funds. Note that it was written before 2022, so use the Rs 20 lakh figure above.

Steps to file NDH-4

1. Incorporate the Nidhi through SPICe+ and note the date, because your 120 days start there. Our registration process post covers this stage.
2. Bring in members and capital until you cross 200 members and Rs 20 lakh NOF.
3. Prepare the member details and the NOF working with your CA.
4. File the form on the MCA portal with the attachments it asks for.
5. Track the status. If nothing is decided in 45 days, the application is deemed approved.

Plan the calendar early. The 200 members rule is usually what eats the time, which we cover in how long Nidhi registration takes.

Why NDH-4 gets stuck or rejected

The Rules do not publish a neat list of rejection grounds, so this is our reading of where the conditions bite:

• Fewer than 200 members on the date of filing.
• NOF below Rs 20 lakh, often because paid-up capital was raised in stages. Our post on capital needed for a Nidhi shows how to plan it.
• Directors or promoters who do not meet the fit and proper test.
• Papers that do not match each other, such as member lists that differ from the register.
• Filing after the 120 days have run out.

If you cannot meet the conditions in time

The Rules provide NDH-2, an application to the Regional Director for more time when the members, NOF or ratio conditions are not met. The Rules put the filing at 30 days from the close of the first financial year (Rule 5(3)), so confirm the current rule before relying on it. Speak to your CA early, because waiting for the deadline leaves no room.

After the declaration

Once declared, the company moves into regular compliance: NDH-1 and the other returns, and the half-yearly NDH-3 return. The overall route is in our pillar guide to Nidhi company registration, and our Nidhi registration service includes the NDH-4 filing.

Related reading

• Nidhi Company Registration in India: Process, Documents, Cost and Timeline
• NDH-3 Half-Yearly Return: Due Dates and Contents
• How Long Nidhi Registration Takes, From Incorporation to NDH-4
• Nidhi Company Registration Process: Step by Step
• Capital Needed to Start a Nidhi Company
• NDH-1 and NDH-4

Need help with your Nidhi company? See our Nidhi company registration service, call +91 93117 95484, or write to mail@taxhint.in.

FAQs

What is the time limit for NDH-4?

A company incorporated as a Nidhi applies within 120 days of incorporation. The clock starts on the date of incorporation, not the date you start collecting members.

How many members does NDH-4 need?

At least 200 members, along with net owned funds of at least Rs 20 lakh. Check the current Rule and the MCA form before filing.

What happens if NDH-4 is not approved?

Without the declaration, the company cannot take deposits from or lend to members. Fix the gaps and speak to your CA about the next step.

Does silence from the government mean approval?

Yes, the Central Government has 45 days to decide, and if it does not, the application is deemed approved. Keep a record of your filing date and acknowledgement.

More in this Nidhi series