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NIDHI Company Strike Off / Closure in India

NIDHI Company Strike Off

NIDHI Company Strike Off in India

The closure of the NIDHI Company is to be done as per sub-section 2 section 248 of the Companies Act, 2013 along with the rules notified under Companies Act 2013 that is Companies (Removal of Names of Companies from registrar of the companies) Rules, 2016. As NIDHI Companies main motive is to borrow and lend money amongst the members therefore closure of NIDHI company is not any easy task as it involves monetary transaction even though it merely among the companies members.

Reason for the Closure

NIDHI Company can proceed for the closure due to the many reasons which can be an external factor or internal factor.

  • Section 248 (1) of the Companies Act, 2013 states that, If any company fails to begin its business activity within 12 months of incorporation or else if company is not carrying out any business or commercial activity for preceding two years and to save your company from default of non-compliance, penalties, you may proceed for the removal of the name of the company after being duly complied of obligatory event based and annual compliances.
  •  Also if the company is not functional and not generating the profits or the promoter and his team is not willing to work or If you have ample of the resources but the business you chose is not generating you good amount of profit then you may decide to close the company and utilize the resources in a better business but after complying the requirements of section 248 of companies act, 2013 i.e. company is not in default or company has paid all its liabilities and dues to the department, Company has filed all its pending returns and also the filing for the preceding two should be on NIL basis.

Procedure for filing the strike off with the registrar of companies

  • First of all the board meeting is to be conducted for passing the resolution for the proposal of strike off.
  • Secondly convene the General meeting for passing the Special resolution or obtaining the consent of at least 75% members for the closure of NIDHI Company.
  • After passing of the special resolution in the general meeting file MGT-14 for filing of the resolution as specified in the act.
  • The Newspaper advertisement to be published in the vernacular language and one in English language on such place where it carries on its operations at least 30 days preceding to such closure notifying the general public and including members about such cessation.
  • The copy of the advertisement or a notice informing such closure is to be fixed on the notice board of NIDHI for a period of no less than thirty days from the date on which announcement was published. The notice shall be in a prescribed format form INC-26.
  • Now the application to be submitted in form STK-2 along with required documents as mentioned below informing the registrar of Companies for such closure.

Documents required for the Closure

  • Bank closure certificate along with the transaction statement
  • Duly stamped and notarized indemnity bond in prescribed format STK-3 and stamp duty be at variance for some state.
  • Duly stamped and notarized Affidavit in prescribed format STK-4 and stamp duty be at variance be at variance for some state.
  • Statement of accounts (STK -8) after generation of UDIN.
  • Copy of Special resolution passed in the meeting or the consent letter of at least 75 percent members.
  • Balance sheet and annual return and all the proof of NIDHI compliances (NDH-1, NDH-3, NDH-4 as the case may be).
  • Self attested ID proofs and Address proof of all the directors with attestation of professional.
  • Copy of newspaper advertisement is to be attached.
  • Any other documents stating the proof of such closure.

Time Limit

Generally this process takes 30-35 working days’ time period to complete all above mentioned formalities for the strike off of the NIDHI Company. Thereafter, Registrar of companies if fully satisfied after scrutiny with the details and documentation as filed he may initiate the Action for strike off.

For the registration and procedure of NIDHI company Registration please refer to the link mentioned below:

https://www.neusourcestartup.com/blog/all-about-nidhi-company

 

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20 Mar

Shivani Gupta
Shivani Gupta

“Starting Any Business Is A Formidable Journey Of A Lifetime!” NEUSOURCE ‘The Leader of Business registration’ clears the way for success in the present era by helping new startups. LET's GET STARTED!!