Nidhi Company Registration

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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.

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Features of Nidhi Company Registration

Why most people choose MicroFinance as compared to other Business entities
Member-to-Member Financial Activities
A Nidhi Company can only accept deposits from and lend money to its registered members. This ensures operations remain within a close-knit community, promoting trust, accountability, and mutual financial benefit.
No RBI License Required
Although classified as a Non-Banking Financial Company (NBFC), a Nidhi Company is exempt from obtaining approval from the Reserve Bank of India. It operates under the regulatory framework of the Ministry of Corporate Affairs and the Nidhi Rules, 2014.
Minimum Capital Requirement
At the time of incorporation, a Nidhi Company must have a minimum paid-up equity share capital of ₹5 lakh. This requirement ensures initial financial strength and reflects the company’s commitment to regulatory compliance and sustainable financial operations.
Number of Members
To register a Nidhi Company in India, it is mandatory to have a minimum paid-up equity share capital of ₹5 lakh at the time of incorporation. This requirement ensures financial credibility, operational readiness, and compliance with the norms set by the Ministry of Corporate Affairs.
One Office, One Community
A Nidhi Company is typically permitted to operate only within the state in which it is registered. To expand operations beyond state boundaries, the company must first obtain special approval from the Regional Director, Ministry of Corporate Affairs, ensuring legal compliance and oversight.
No Complex Financial Instruments
A Nidhi Company is strictly restricted from engaging in chit funds, leasing, hire-purchase, insurance, or securities business. It can only accept deposits from and lend to its registered members and is not allowed to advertise for public deposits.

Benefits of Registering a Nidhi Company

Setting up a Nidhi Company offers a blend of simplicity and financial empowerment, especially in semi-urban and rural areas. Here’s why it might work for you:

Cost-Effective Financial Institution

Starting and operating a Nidhi Company is cost-effective, requiring lower capital, fewer compliance obligations, and minimal regulatory approvals, making it an affordable alternative to traditional banks or fully regulated NBFCs.
No RBI Compliance Headaches
Because a Nidhi Company conducts financial activities exclusively among its registered members, it is exempt from core RBI regulations, resulting in simplified compliance procedures and reduced regulatory burden compared to other financial institutions.
Better Financial Discipline
A Nidhi Company fosters financial discipline by encouraging members to save regularly. It also offers easy and timely access to credit at reasonable interest rates, promoting mutual benefit and financial support within its member community.

Easy and Quick Loan

Nidhi Company members can easily avail loans by pledging deposits, gold, or property as collateral. The process involves fewer formalities, offering quick access to funds with simplified documentation and approval procedures.
Low Risk of Default
Since loans are provided only to registered members within a closely connected community, trust levels are higher. This familiarity significantly reduces the chances of defaults, ensuring safer and more secure lending practices.
Legal Recognition
Registered under the Companies Act, 2013, a Nidhi Company gains a formal legal identity. This recognized status builds trust, ensures compliance, and adds credibility to its financial operations and member services.

Conditions to be fulfilled for getting ‘Nidhi’ status/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 Rs. 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

  • Passport Size Photograph of all Directors
  • Address proof of all the Directors. (Bank statement/Electricity bill/) (not more than 2 months)
  • PAN card and Aadhar card of all Directors.
  • Identity proof of the all Directors.(Driving license/ Voter ID card/passport)
  • Email id and mobile number of all Directors.
  • 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 Rs. 100 stamp paper with Notary)
  • Board resolution authorising Director for GST in the company
  • Digital signature certificate of All Directors.
  • DIR-2 of all Directors.
  • NOC (Company name should be mentioned) (on Rs. 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)
Every proposed director of a Nidhi Company must obtain a Digital Signature Certificate (DSC), which enables them to securely sign incorporation documents electronically, ensuring authenticity and compliance during the registration process.
2. Apply for Director Identification Number (DIN)
A Director Identification Number (DIN) is mandatory for anyone becoming a director in a Nidhi Company. It is conveniently obtained through the SPICe+ form submitted during the incorporation process with the Ministry of Corporate Affairs.
3. Choose a Unique Name
To begin the registration of a Nidhi Company, you must reserve a distinct company name using the RUN (Reserve Unique Name) service available on the MCA portal. It is mandatory that the proposed name includes the words “Nidhi Limited” as per statutory naming requirements.
4. Draft MOA & AOA
The Memorandum and Articles of Association (MoA and AoA) of a Nidhi Company must clearly define its core objectives, such as encouraging thrift and mutual benefit through savings and loans, exclusively among members, ensuring transparency, legality, and compliance with regulatory norms.
5. File SPICe+ (INC-32) Form
For Nidhi Company registration, submit the incorporation application along with essential documents, including PAN and Aadhaar of all proposed directors, proof of the company’s registered office address, duly drafted MOA and AOA, and the necessary declaration forms as per MCA compliance requirements.
6. Receive Incorporation Certificate
After successful verification of submitted documents, the Ministry of Corporate Affairs (MCA) issues a Certificate of Incorporation along with a unique Company Identification Number (CIN), legally establishing the Nidhi Company’s existence.

What do you get?

Unique Name Approval
You receive official approval for a unique company name through the MCA’s RUN service. This name is legally reserved and recognized, ensuring your Nidhi Company has a distinct identity in government records.
Company PAN & TAN
Your Nidhi Company receives a PAN and TAN from the Income Tax Department during registration. These are mandatory for filing returns, deducting taxes, and handling all financial transactions legally and smoothly.
Digital Signature Certificate – 2
You get two Digital Signature Certificates (DSCs) for the proposed directors. DSCs are essential for electronically signing incorporation documents, ensuring secure, verified, and legally valid submissions on the MCA portal.
Memorandum of Association
The Memorandum of Association (MoA) clearly states your Nidhi Company’s objectives, operational scope, and powers. It’s a vital legal document required for incorporation and sets the foundation for future activities.
Articles of Association
The Articles of Association (AoA) detail the internal rules, governance structure, and management procedures of your Nidhi Company, guiding how it operates and ensuring compliance with legal and regulatory requirements.
Director Identification Number – 3
Three directors must obtain Director Identification Numbers (DINs), unique legal identifiers that authorize them to represent the company and ensure compliance with regulatory requirements.
Frequently Asked Questions

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We provide the fastest Online Company Registration Services in India. Our team knows the importance and thrill of getting your first company registration. Thus, delivers services with utmost seriousness.

We provide the fastest Online Company Registration Services in India. Our team knows the importance and thrill of getting your first company registration. Thus, delivers services with utmost seriousness.

We provide best in class personal assistance

Once, you decide to get started with your company registration process with us, we assign you a personal dedicated assistant who ensures a smooth & efficient user experience and answers all your queries on time

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