Annual Compliance for Nidhi & Pvt Ltd Companies

Running a business involves more than just daily operations. If you're managing a Nidhi company or a private limited company, staying compliant with annual filing requirements is just as important as earning profits. Many small businesses overlook these responsibilities, only to face penalties or even disqualification later.

Understanding your annual compliance obligations is the first step to running a legally sound and trustworthy organization. Let’s break it down.

What is a Nidhi Company?

A Nidhi company is a type of non-banking financial company (NBFC) recognized under Section 406 of the Companies Act, 2013. These companies are formed to cultivate the habit of thrift and savings among their members and can only deal with them—not the general public.

While Nidhi companies enjoy certain exemptions under the law, they still have a list of mandatory annual compliance requirements to follow.

Key Annual Compliance for Nidhi Companies

Here’s what a Nidhi company needs to take care of each year:

1. Form NDH-1 – This form must be filed within 90 days of the financial year-end, detailing the number of members, deposits, and reserves.

2. Form NDH-2 (if required) – If a Nidhi company cannot meet the minimum requirements (like maintaining 200 members), it must seek an extension by filing NDH-2.

3. Form NDH-3 – Filed twice a year, this is a half-yearly return on the company’s financial position.

4. Annual Returns (MGT-7) – A detailed return about shareholders and changes during the year.

5. Financial Statements (AOC-4) – Must be filed with the Registrar of Companies along with the audited financials.

Non-compliance can lead to fines and regulatory action, so timely filing is essential.

Annual Compliance for Private Limited Company

Private limited companies have a separate set of annual compliance requirements. Regardless of business activity, these filings are mandatory:

1. Board Meetings – Minimum of two per year, properly recorded.

2. Statutory Audit – Conducted by a Chartered Accountant to verify financial accuracy.

3. Annual Return (Form MGT-7) – Includes details of shareholders, directors, and other key data.

4. Financial Statements (Form AOC-4) – Submit balance sheet and profit & loss details with the Registrar of Companies.

5. DIR-3 KYC – Directors must update their KYC details annually.

6. Income Tax Return – All companies must file this with the Income Tax Department, regardless of profit or loss.

Why Annual Compliance Matters

For both Nidhi and private limited companies, annual compliance isn’t just a formality. It helps maintain credibility, avoid penalties, and ensures the company stays active under the law.

Many business owners find it hard to keep up with due dates and paperwork. This is where professional help comes in handy. Hiring a compliance expert or CA can save time, reduce errors, and provide peace of mind.

FAQs

1. What happens if a Nidhi company misses its compliance deadline?
Late filing can attract penalties and even the risk of license cancellation by the Registrar.

2. Do private limited companies with no turnover still need to file returns?
Yes, even dormant companies must comply with annual filing requirements.

3. Can I handle the compliance process myself?
While possible, it’s advisable to work with a professional to ensure accuracy and timely filing.

4. What is the penalty for non-compliance?
Penalties can range from ₹50 to ₹100 per day, depending on the delay and the form in question.