Rule 3A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 3A says that a public company becomes a declared Nidhi only when the Central Government notifies it in the Official Gazette on an application in Form NDH-4. It also sets the filing deadline for Nidhis incorporated after 15 August 2019 and, since 2022, stops a Nidhi that has not complied from raising deposits or giving loans. This article reads rule 3A as amended up to G.S.R. 413(E) dated 16 July 2024; check for amendments made later. Companies unsure of their position can take a view from a compliance advisory review before filing.
Rule 3A was inserted by G.S.R. 467(E) (in force 15 August 2019). The Central Government, on an application in Form NDH-4 with fee from a public company, and if satisfied that it meets the requirements of the Rules, notifies it as a Nidhi in the Official Gazette. A Nidhi incorporated on or after 15 August 2019 must file within sixty days after one year from incorporation (or the extended period). A company that does not comply cannot file Form SH-7 or Form PAS-3, and, since 2022, cannot raise deposits or give loans under the Rules.
The main paragraph
Rule 3A is headed "Declaration of Nidhis". It reads, in substance: the Central Government, on receipt of an application (in Form NDH-4 along with fee thereon) of a public company for declaring it as Nidhi, and on being satisfied that the company meets the requirements under these rules, shall notify the company as a Nidhi in the Official Gazette.
Three points follow from the words:
- Only a public company can apply.
- The application is in Form NDH-4, with a fee. The fee is not stated in the Rules; the Rules elsewhere point to the Companies (Registration Offices and Fees) Rules, 2014 for fees, and the amount should be checked there.
- The declaration is by notification in the Official Gazette. The Central Government decides whether the company "meets the requirements under these rules".
The Act's side of the subject, section 406, is explained in our post on section 406 of the Companies Act, 2013.
The three original provisos (2019)
First proviso: the deadline. A Nidhi "incorporated under the Act on or after the commencement of the Nidhi (Amendment) Rules, 2019" shall file Form NDH-4 within sixty days from the date of expiry of:
- (a) one year from the date of its incorporation; or
- (b) the period up to which extension of time has been granted by the Regional Director under sub-rule (3) of rule 5.
The commencement of the 2019 Rules is 15 August 2019, so the first proviso speaks to Nidhis incorporated on or after that date. We do not compute calendar dates here: the rule's words are "sixty days from the date of expiry" of the one-year period or the extended period. For extension under rule 5(3), see our article on rule 5.
Second proviso: early filing. "Nothing in the first proviso shall prevent a Nidhi from filing Form NDH-4 before the period referred therein." A Nidhi that meets the requirements early is at liberty to apply early.
Third proviso: no SH-7 or PAS-3. "In case a company does not comply with the requirements of this rule, it shall not be allowed to file Form SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment)." In practice this blocks a non-complying Nidhi from recording an increase in authorised capital or a return of allotment. See our posts on Form SH-7 and Form PAS-3.
The three provisos added in 2022
G.S.R. 301(E), dated 19 April 2022, inserted three more provisos after the third.
Fourth proviso: no deposits or loans. No company which has not complied with the requirements of the rule, or fails to comply on or after 19 April 2022, or whose Form NDH-4 application "is or has been rejected by the Central Government", shall raise any deposit from its members or provide any loan to its members under the provisions of these rules. The bar runs from the date of the non-compliance, the date of commencement of the 2022 Rules, or the date of rejection of the application, whichever is later.
Fifth proviso: deemed Chapter V deposits. Any deposit raised after that later date "shall be deemed to have been raised in pursuance of Chapter V of the Act, and shall be subject to all the requirements under that Chapter, or under any other provisions of the Act or the rules made thereunder, as the case may be." Chapter V of the Act covers deposits; the Act is not reproduced here. See our posts on section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
Sixth proviso: companies incorporated from 19 April 2022. "Nothing in this rule shall apply to companies incorporated as Nidhi on or after the commencement of the above said rules." Those companies follow rule 3B instead; see our article on rule 3B.
Which rule applies to which company
| Company | Rule that applies |
|---|---|
| Declared as Nidhi under the 1956 Act (rule 2(a)) | Rule 23B, not rule 3A |
| Functioning as a Nidhi, or incorporated under the Act before 15 August 2019 | Rule 23A, read with rule 3A |
| Incorporated 15 August 2019 to 18 April 2022 | Rule 3A (sixty-day deadline) and rule 5 |
| Incorporated on or after 19 April 2022 | Rule 3B; the sixth proviso takes it out of rule 3A |
For the older companies, see our article on rules 23A and 23B.
What happens on non-compliance
Taken together, a Nidhi that has not complied with rule 3A faces these consequences as printed:
- It cannot file Form SH-7 or Form PAS-3.
- It cannot raise deposits from members or give loans to members under the Rules, from the date of non-compliance, the 2022 commencement or rejection, whichever is later.
- Deposits raised in that situation are treated as raised under Chapter V of the Act and carry its requirements.
Rule 24 of the Nidhi Rules also prints a fine for contravention, and the penalty provisions of the Act as in force should be checked.
An example
Meera Mutual Nidhi Limited was incorporated as a Nidhi under the Act on 10 October 2020. Rule 3A's first proviso gives it sixty days from the expiry of one year from incorporation, or from the end of any extended period the Regional Director granted under rule 5(3), to file Form NDH-4. If it files and the application is rejected, the fourth proviso stops it raising deposits or giving loans from the date of rejection, or the later date the proviso describes.
Need help with Form NDH-4?
Deciding whether your company is on the rule 3A track, the rule 23A track or the rule 3B track is the first step, and the Form NDH-4 papers follow from it. Our compliance advisory team can review your incorporation date and filing position and prepare the application.
Key takeaways
- Only a public company can be declared a Nidhi, by Gazette notification on Form NDH-4 with fee.
- The first proviso gives Nidhis incorporated on or after 15 August 2019 sixty days after one year from incorporation, or after the extended period under rule 5(3).
- Early filing is allowed.
- Non-compliance blocks Form SH-7 and Form PAS-3.
- Since 19 April 2022, a company that has not complied, or whose application is rejected, cannot raise deposits or give loans under the Rules; such deposits are treated as Chapter V deposits.
- Companies incorporated as Nidhi on or after 19 April 2022 are under rule 3B.
Read next
- Rule 3B: declaration within 120 days and fit and proper criteria
- Rules 23A and 23B: older Nidhis and Form NDH-4
- Section 406 of the Companies Act, 2013: Nidhi companies
- Form SH-7: purpose, applicability and format
Disclaimer: Based on the Nidhi Rules, 2014 as notified (G.S.R. 258(E), 31 March 2014) and as amended by G.S.R. 467(E) of 2019, G.S.R. 81(E) and 114(E) of 2020, G.S.R. 301(E) of 2022, G.S.R. 35(E) of 2023 and G.S.R. 413(E) of 2024, as consulted on 3 October 2026. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.