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What is Nidhi Company?

A Nidhi Company is a company in the Indian non-banking finance sector. Their core business is borrowing and lending money among their members.

They are also commonly known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.

They are regulated by Ministry of Corporate Affairs (MCA). Reserve Bank of India (RBI) is empowered to issue directions in matters relating to their deposit acceptance activities.

If you wish to start your Nidhi Company and build a great business. Get started and register now.

Nidhi Company Registration Guide

Eligibility to register as Nidhi company?

Public Company

Nidhi Company that has to be incorporated must be established as a public company.

Minimum Capital requirement

Minimum paid up capital requirement to start a Nidhi Company is Rs. 5 Lakhs.

Minimum members requirement

The minimum of 7 members (shareholders) are required to start a Nidhi company.

Minimum directors requirement

Minimum of 3 directors are required to start a Nidhi company.

Post Incorporation requirements for Nidhi Company?

Minimum Members

Nidhi Company must have minimum 200 members (shareholders).

Net Owned Fund

It must also ensure that net owned funds are Rs. 10 Lakhs or more.

Ratio of Fund

Company must also ensure that the ratio of net owned funds to deposit is not more than 1:20.

Term Deposit

It must have unencumbered term deposits of not less than 10% of the outstanding deposits.

Post Incorporation Compliance Scenario

If the Nidhi Company satisfies above conditions, the Company shall within 90 days from the close of first financial year after incorporation, file NDH-1 duly certified by a Practicing CA/CS/CWA.

In case, till the end of first financial year Nidhi company was not able to meet above requirements, Nidhi Company shall make an application within 30 days from the close of first financial year to the Regional Director in form NDH-2 for extension of time.

If even  after end of second financial year Nidhi company is not able to meet the above requirements, then the Nidhi Company shall not accept any further deposits till it complies with the provisions, and Nidhi company will be liable for penal consequences.

Benefits of Registering a Nidhi Company

Easy Formation
The formation of a Nidhi company is a quite simple process. There are minimal requirements for the formation of a Nidhi company.
Less or no risk
In Nidhi companies, only the members are involved with the financial transactions which make it safe and easy to track with the person depositing or borrowing funds from the company.
Focus on Savings
The primary objective of Nidhi companies is to promote the culture of savings among the people of India. Nidhi companies ensure that they will never jeopardize the savings of their members where ever they invest. Savings is an important practice to be inculcated in the individuals.
Net-owned Funding System
Net-owned funding refers to the transaction where the owner invests an amount in the business to raise funds for the same. In Nidhi companies the ratio of net-owned funding is 1:20, which means if an owner invests Re. 1 in the business he/she can raise a fund of Rs 20 for the business. This feature of Nidhi companies makes it cost effective for owners to invest in new business ventures and grow their company with more capital and diversify their business.
Limited liability
Directors and shareholders have limited liability, i.e. if the company suffers from any financial loss, then personal assets of shareholders and directors cannot be seized to pay the debts.
Separate Legal entity
Being a separate legal entity from its shareholders, directors as well as promoters, Nidhi Company can own property and incur debts on its own name.

Documents Required For Nidhi Company Registration

Passport Size Photo

Photographs of all the directors and members

PAN Card

PAN Card of every director and member

Proof of Identity

ID Proof of all the directors and members like driving license, passport voter ID, etc.

Company Name

A unique name you wish to start your company with. Give 6 options for fast registration.

Rent Agreement

If Rented Business than Rent Agreement Copy else sale deed of the property

Company's Objective

What service, product or goods company wants to sell or manufacture.

Business Address Proof

Address Proof of the registered office like electricity bill or any other utility bill

Other Miscellaneous


Procedure for Nidhi Company Registration

  • Digital Signature DSC

    Application for DIN & DSC

    DIN of directors and DSC for signing are required.

  • name-application

    Application to MCA

    Application in Form INC-1 for reservation of name

  • document-preparation

    MOA & AOA

    MOA & AOA is to be prepared according to NIDHI company objects

  • e-forms-uploading

    SPICe+ form application

    Apply for incorporation & get incorporation certificate

  • work-completion

    PAN & TAN and opening of bank account

    Once you get Incorporation Certificate. Application for PAN & TAN along with opening of a bank account is to be done.

Nidhi Company Registration Service Packages

Nidhi Company - Basic

Company Incorporation Only
  • PAN & TAN Registration
  • Class II DSC (7 Nos)
  • DIN (3 Nos)
  • 10 Copies of Share Certificate
  • Stamp Paper For Authorized Capital upto Rs. 10 lakhs*
  • Company's Seal
  • Free CA Consultancy

Nidhi Company - Brand Protect

Includes Share Certificates + TM
  • PAN & TAN Registration
  • Class II DSC (7 Nos)
  • DIN (3 Nos)
  • 10 Copies of Share Certificate
  • Stamp Paper For Authorized Capital Upto Rs. 10 lakhs*
  • Company's Seal
  • Free CA Consultancy
  • MSME Certification (Optional)
  • GST Registration
  • 200 Share Allotment
  • TM Registration

Nidhi Company - Share Allotment

Includes Share Allotment
  • PAN & TAN Registration
  • Class II DSC (7 Nos)
  • DIN (3 Nos)
  • 10 Copies of Share Certificate
  • Stamp Paper For Authorized Capital upto Rs. 10 lakhs*
  • Company's Seal
  • Free CA Consultancy
  • 200 Share Allotment

Frequently Asked Questions

No, following securities cannot be issued by Nidhi Company:

•          Debentures

•          Preference shares

•          Other kinds of debt securities

No, Nidhi Company cannot perform its operations outside the the state in which the registration has taken place.

The normal registration route can take up to 30 days but registration through SPICe takes just 7 days.

No, Nidhi Companies are not authorized to advertise their activities.

Form AOC-4:It is the form required for filing financial statement and other documents

Form MGT-7: It is the form required for filing Annual Return by Companies having share capital

Form NDH-1: Statutory Compliance

Form NDH-3: Half yearly compliance

If the person don’t own an office but have an office on rent, the person can submit rental agreement and an NOC from the landlord for Nidhi company registration

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