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What is Nidhi Company Registration?
If you’re looking to start a small-scale finance business that’s built on trust, savings, and community welfare, a Nidhi Company might be the perfect structure for you. Commonly known as a mutual benefit society, Nidhi Companies are formed to encourage savings and lend within a group of members. It is registered as a public company and should have “Nidhi Limited” as the last words of its name.
A Nidhi Company is a type of Non-Banking Financial Company (NBFC) recognized under Section 406 of the Companies Act, 2013, and governed by the Nidhi Rules, 2014.
Unlike traditional NBFCs or banks, a Nidhi Company:
- Accepts deposits only from its registered members
- Lends only to those same members
- Exists to promote savings, thrift, and financial discipline among a specific community
Nidhi means “treasure” in Sanskrit — and that’s exactly the idea: a trusted, collective pool of savings.
A Nidhi Company is more than just a business — it’s a financial family built on trust, savings, and shared prosperity. If you’re aiming to create a community-centric financial institution that empowers people through responsible lending and saving, this is one of the most accessible and regulated ways to do it in India.
Yes, you’ll need to maintain compliance and meet certain milestones, but the benefits — financial inclusion, legal recognition, and a solid member base — make it worthwhile.
Need help registering your Nidhi Company? We’re here to make the process smooth and hassle-free. Let’s build financial empowerment together — one member at a time.
Quick Facts
- Governed by Section 406 of the Companies Act, 2013 and Nidhi Rules, 2014
- Formed with the objective of cultivating savings among members
- Can accept deposits and provide loans only to its members
- Minimum 7 shareholders and 3 directors required
- Minimum paid-up capital: ₹5 lakh (to be increased to ₹10 lakh within 1 year)
- Must add at least 200 members within 1 year of incorporation
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, and governed by the Nidhi Rules, 2014.
Unlike traditional NBFCs or banks, a Nidhi Company:
- Accepts deposits only from its registered members
- Lends only to those same members
- Exists to promote savings, thrift, and financial discipline among a specific community
Nidhi means “treasure” in Sanskrit — and that’s exactly the idea: a trusted, collective pool of savings.
A Nidhi Company is more than just a business — it’s a financial family built on trust, savings, and shared prosperity. If you’re aiming to create a community-centric financial institution that empowers people through responsible lending and saving, this is one of the most accessible and regulated ways to do it in India.
Yes, you’ll need to maintain compliance and meet certain milestones, but the benefits — financial inclusion, legal recognition, and a solid member base — make it worthwhile.
Need help registering your Nidhi Company? We’re here to make the process smooth and hassle-free. Let’s build financial empowerment together — one member at a time.
Key Features of a Nidhi Company
Here are some of the standout features:
- Member-to-Member Financial Activities
All loans and deposits are restricted to registered membe₹ - No RBI License Required
Although it’s an NBFC, a Nidhi Company doesn’t need RBI approval. - Minimum Capital Requirement
₹5 lakh is the minimum capital required at the time of incorporation. - Number of Members
Minimum of seven members is required to start a Nidhi Company out of which three members must be the directors of the company.You must reach 200 members within one year of registration. - One Office, One Community
The company must operate primarily in one state unless permission is granted otherwise. - No Complex Financial Instruments
Nidhi Company can’t deal with chit funds, hire-purchase finance, leasing finance, insurance or securities business. It is strictly prohibited from accepting deposits from or lending funds to, any other person except membe₹ Also, it can’t advertise itself to ask for any deposits.
Conditions to be fulfilled for getting ‘Nidhi’ status and Post Incorporation Compliance Within one year of its registration
- Nidhi Company should have minimum 200 members within one year from commencement
- Also, the net owned funds should be 10 lakh rupees or more. Net owned funds = Equity share capital + free reserves (-) accumulated losses (-) intangible assets
- Unencumbered term deposits must be 10% or higher of the outstanding deposits
- The ratio of net owned funds to deposits shouldn’t be more than 1:20
If Nidhi Company satisfies all above conditions, it should file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA.
Extension of another financial year can be availed upon submission of NDH-2 to the Regional Director within 30 days from the end of the first financial year.
If even after the second financial year, it doesn’t fulfill the requirements, it can’t accept deposits till it complies with the provisions, and also a penalty will be imposed.
Prerequisites For Forming a Nidhi Company
To establish a Nidhi Company, the following criteria must be met:
- The company must have the suffix “Nidhi Limited” in its name
- The company must be a Public Company.
- Minor, Body Corporate and a Trust cannot be admitted as members to Nidhi.
- The minimum paid-up share capital must be ₹ 5 lakh.
- The company cannot issue preference shares, in the case where such shares have been issued by the company prior to the commencement of the Act, the same shall be redeemed.
Documents Required for Nidhi Company Registration
- Passport Size Photograph of all Directors
- Address proof of all the Directo₹ (Bank statement/Electricity bill/) (not more than 2 months)
- PAN card and Aadhar card of all Directo₹
- Identity proof of the all Directo₹(Driving license/ Voter ID card/passport)
- Email id and mobile number of all Directo₹
- Registered office address proof.(Electricity bill/ Telephone bill/Gas Bill) (not more than 2 months)
- Rent Agreement (Company name should be mentioned with complete address) (on ₹ 100 stamp paper with Notary)
- Board resolution authorising Director for GST in the company
- Digital signature certificate of All Directo₹
- DIR-2 of all Directo₹
- NOC (Company name should be mentioned) (on ₹ 100 stamp paper)
- Provisions of Rule 4,5,6,10 of Nidhi Rules Company Declaration
Process to Register a Nidhi Company
Setting up a Nidhi Company involves a few steps, but with the right guidance, it’s pretty straightforward.
1. Obtain Digital Signature Certificate (DSC)
All proposed directors must have a DSC to sign documents electronically.
2. Apply for Director Identification Number (DIN)
Get DIN through the SPICe+ form during incorporation.
3. Choose a Unique Name
Reserve your company name through the RUN service on the MCA portal. Include words like “Nidhi Limited”.
4. Draft MOA & AOA
The Memorandum and Articles of Association must clearly reflect Nidhi objectives.
5. File SPICe+ (INC-32) Form
Submit the incorporation application with:
PAN/Aadhar of directors
Office address proof
MOA, AOA
Declaration forms
6. Receive Incorporation Certificate
Once verified, the MCA issues:
Certificate of Incorporation
Company Identification Number (CIN)
What documents do you get after Nidhi Company Registration?
- Unique Name Approval
- Company PAN & TAN
- Digital Signature Certificate – 2
- Memorandum of Association
- Articles of Association
- Director Identification Number – 3
Post-Registration Compliances for Nidhi Company
- Minimum 200 members within 1 year
- Net Owned Funds of ₹10 lakh or more
- Maintain Net Owned Fund to deposit ratio not exceeding 1:20
- File statutory returns (NDH-1, NDH-2, NDH-3, NDH-4) with MCA
- Annual financial statements and returns filing with the RoC
Why Choose Mr.Brandy for Nidhi Company Registration?
- End-to-end support from incorporation to compliance
- Drafting of MoA and AoA aligned with Nidhi Rules
- Expert guidance on increasing members and raising capital
- Dedicated compliance reminders to avoid penalties
- 500+ companies successfully registered across India
Register Your Nidhi Company Today
FAQs on Nidhi Company Registration
What is the minimum number of members required to start a Nidhi Company?
You need at least 7 members and 3 directors.
Can a Nidhi Company accept deposits from the public?
No. Deposits and loans can only be accepted and given to members.
Is RBI approval required for a Nidhi Company?
No. Nidhi Companies do not require RBI approval, but they must follow MCA guidelines.
How much capital is required to register a Nidhi Company?
A minimum of ₹5 lakh paid-up capital is required at incorporation, to be increased to ₹10 lakh within 1 year.
How many members are required after incorporation?
At least 200 members within one year of registration.
Can a Nidhi Company open branches?
Yes, if it has earned profits for three consecutive years and with prior MCA approval.
What is the tax rate for Nidhi Companies?
They are taxed like other domestic companies under the Income Tax Act.