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Nidhi registration

If you're looking to register a Nidhi Company in India, you've come to the right place. Our team of experts can help you with the entire registration process and make it a hassle-free experience for you. Nidhi Companies are non-banking financial companies that are specifically designed to promote savings among its members. Our affordable packages and fast registration process make it easy for you to get started with your Nidhi Company registration. Contact us now to get started!

Nidhi companies have been present in India since the 1900s, as documented by the Ministry of Corporate Affairs (MCA), which has recorded the incorporation of several nidhi companies dating as far back as 1903. Over time, the number of nidhi companies has continued to increase, and they have lived up to their motto of providing a "money-back promise" and "risk-free service." These companies have become popular in the Indian financial market due to several distinct advantages that are not typically available with other financial institutions.

Under the Companies Act of 2013, Nidhi companies are recognized as a part of the Indian Non-Banking Finance Sector (NBFCs). The term "Nidhi" refers to "treasure" in Hindi, and these companies primarily deal with borrowing and lending money to their members. Nidhi companies are public limited companies, and their members contribute funds that are available to other members at low interest rates.

These companies operate on the principle of mutual benefits and are regulated by the Ministry of Corporate Affairs (MCA). The main objective of establishing a Nidhi company is to encourage members to reduce expenses and save funds. It is worth noting that the members are distinct from the company itself, and the company can carry out transactions under its own name. This includes buying, selling, acquiring assets, incurring debt, and being sued or suing under its own name.

Nidhi companies are governed by the Nidhi Rules of 2014 and are not subject to regulation by the Reserve Bank of India (RBI). Consequently, nidhi companies do not need to obtain approval or a license from the RBI, making the registration process comparatively simple. Unlike other NBFCs, nidhi companies do not require an RBI license to commence operations. However, they must ensure a minimum membership of 200 individuals within one year of starting their operations.

At least seven individuals are needed to open a nidhi company. Nidhi companies cannot solicit funds from the general public and are limited to opening a maximum of three branches within a district.

They are not permitted to engage in microfinance or vehicle financing activities. Deposits can only be repaid after a three-month period from the acceptance date, and depositors are not entitled to any interest until six months after the deposit has been made.

Salient features:

  • A nidhi company has no upper limit on the number of its members and hence can have as many members as the company desires. The shares held by its members can be transferred freely among them.
  • The liability of directors and shareholders is limited to the extent of the amount remaining unpaid on their respective subscribed shares.
  • Nidhi company is not allowed to raise funds from the general public.
  • In order to deposit money into a nidhi company account or to borrow money from it, one has to become its member first. One can become a member of the company by subscribing to its shares.
  • Nidhi company can open upto three branches within the district. It is not allowed to operate outside the home state. In order to be operational in multiple states, a separate nidhi company would have to be registered, where shareholders can remain the same.
  • Nidhi company is not allowed to do micro finance business & vehicle finance business.
  • A nidhi company is not allowed to repay any deposit within a period of three months from the date of its acceptance.
  • During the first six months from the date of the deposit, no interest can be claimed by the depositor.
  • If any depositor of the nidhi company makes a request for repayment of a deposit, before the termination of the period, against which the deposit was made; the interest rate can be reduced by 2%.
  • Nidhi company is identified as “business name nidhi limited”.

The Registration Process:

The registration for these companies can be completed in just 4steps.

Procure digital signature of directors


Obtain DIN no of directors


Company name approval


Incorporation certificate

In order to register and initiate operations, there are certain requirements that need to be fulfilled.

  • Unique name: A unique name should be proposed for the company. You can check the availability of the company name through our online company name search tools.
  • Directors: Initially, there should be two directors, along with seven stakeholders, all of whom must be natural persons and above 18 years of age. Directors can also become stakeholders. However, the shareholding percentage should be clearly defined.
  • Authorized capital: In order to form a nidhi company, an authorized capital is required. Authorized capital refers to the maximum amount of shares a company holds and can issue.
  • Registered office: In order to start and register a company in India, it is important to have a registered office with an address.This registered office address is publicly available on the website of the registrar of companies (ROC). Residential address can be used as the office address.
  • Net owned fund: Although no paid up capital is required to form a nidhi company, a net owned fund (NOF) of Rs.10 lakhs is needed within 3 months of the registration of the company. Paid up capital implies the amount of money a company receives from its shareholders, against its shares, while NOFs are the sum total of paid up equity and free reserves, after subtracting total loss and intangible assets, of the last audited balance sheets.

Mandatory requirements after incorporation of a nidhi company:

Nidhi company has to ensure the following compliances within one year of incorporation:

  • A minimum of 200 persons should be registered as members in the company, within the initial 12 months of operation.
  • A minimum of Rs. 10 lakhs should be the net owned funds (NOF). Although, no initial capital is needed at the time of registration; Rs. 10 lakhs of NOF is required within 90 days of registration.
  • The NOF deposit ratio should not exceed the proportion of 1:20 ratio of NOF to deposits should not be more than 1:20.
  • Unencumbered term deposits should not be less than 10% of the outstanding deposits.

Why should you register a nidhi company?

  • Easy and affordable registration, formation and incorporation: The process of forming, registering and incorporating a nidhi company is relatively easier and simpler than other NBFCs and financial institutions. Only seven members and three directors are required initially. The paperwork is less. Process of registration is not complicated or long and is affordable. Incorporation too does not take a lot of time.
  • Individual legal entity status: All nidhi companies enjoy a separate legal entity status, due to which they have a broad legal capacity. They can own properties and incur debts under the name of the company. Moreover, a nidhi company continues to exist uninterrupted, until legally dissolved. Due to its individual legal entity status, a nidhi company does not cease to exist, in spite of changes in its membership, like death, retirement or departure of a member. It follows a policy of perpetual succession.
  • Credibility: Nidhi companies are viewed as being more credible than other mutual benefit companies. While these companies are monitored by the state governments, nidhi companies are monitored by the central government and are hence more credible.
  • Simple and easy management systems: In order to incorporate a nidhi company, three directors and seven members are required. Any change in the management board, which is responsible for the regulation of nidhi companies, can easily be brought by filling simple forms with the ROC (Registrar Of Companies). All these are easy and simple procedures that can be completed without much hassle and therefore gives nidhi companies an edge over other financial institutions. Also, less number of members and directors make the functioning of the management relatively easier.
  • Limited liability: This implies that the members are legally responsible only for a limited amount that accounts as liabilities of the nidhi company. Members are not individually responsible for the liabilities of the nidhi company.
  • Minimal risk: Nidhi companies lend money and accept deposits only from its members. Hence, the risk of non repayment of loans is reduced considerably. Unlike other financial institutions and NBFCs, the financial transactions at nidhi companies are restricted only to its members, which reduces risk through external factors. Hence, nidhi companies are considered to be the safest ways of inviting deposits. Nidhi is the safest and cheapest way of raising funds from the public, simply just by registering them as members.
  • Exempted from RBI regulations: As stated earlier, unlike other NBFCs, nidhi companies are not regulated or controlled by the RBI. They do not require the permission or approval of RBI to initiate operations. No license from RBI is required. They are incorporated as public limited companies, with MCA. Their financial activities are regulated by the companies act of 2013 and nidhi rules, 2014. The regulatory compliance of these acts and rules are much less stringent than the RBI, which makes it easy and simple to incorporate nidhi companies.
  • Capital and NOF requirement is low: The minimum capital required to register and incorporate a nidhi company is very low and therefore one of its vital advantages. At least Rs10 lakh net owned fund required within 3 months after registering the company, in which case a registration fee of Rs 19,999 is charged. Therefore, the minimum net owned fund (NOF) required for a nidhi company is much less than any other NBFC.Net owned fund = equity share capital + free reserves- intangible assets- accumulated losses

Documents required for nidhi company

The registration process is completely online. All documents and photographs can be scanned and sent to us through your mobile phones. We at Legal Babu will provide you with all the necessary assistance in the registration process. We will help you by making this process easy and uncomplicated.

Documents of directors and shareholders:

  • Passport size photograph.
  • Copy of PAN card
  • Copy of passport/ driving license/voter identity card.
  • Proof of residence (electricity bill/telephone bill /mobile bill / bank statement).

Documents required for the registered office:

  • Latest electricity bill/ mobile bill/ telephone bill/ (business place).
  • Copy of rent agreement (if rented property).
  • Copy of property papers(if owned property).
  • Landlord NOC (format will be provided).


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