What is a Nidhi Company?

A Nidhi Company is a type of Non-Banking Financial Company (NBFC) registered under Section 406 of the Companies Act, 2013, and governed by the Nidhi Rules, 2014. It is formed with the objective of cultivating the habit of thrift and savings among its members. Nidhi Companies are allowed to take deposits and lend money exclusively to their members.

Key Focus: Encouraging savings and providing financial aid within a close-knit community.

Key Features of a Nidhi Company

• Functions like a mutual benefit society.
• Can accept deposits and provide loans only to its members.
• Requires no RBI license, but registered under the Ministry of Corporate Affairs (MCA).
• Works only in a single state (no pan-India operations without special approval).
• Suitable for small loan businesses like gold loans, personal loans, or group financing.

Benefits of Registering a Nidhi Company

1. Low Capital Requirement: Minimum capital of just ₹10 lakhs.
2. No RBI Approval Required: Easier to register compared to other NBFCs.
3. Simple Registration Process: Quick and cost-effective incorporation.
4. Limited Risk: Operates within a small group of members.
5. Better Compliance: Regulated by MCA with fewer restrictions than NBFCs.
6. Legal Status: Gains a separate legal identity as a company.
7. Better Credibility: Trust among members due to legal recognition.

Eligibility Criteria for Nidhi Company Registration

To register a Nidhi Company in India, the following conditions must be fulfilled:

Step-by-Step Process of Nidhi Company Registration

Here is a simplified process for Nidhi Company registration in India in 2025:

1. Obtain DSC and DIN

• Apply for Digital Signature Certificate (DSC) for all directors.
• Get Director Identification Number (DIN) from MCA.

2. Name Reservation via RUN

• Reserve your company name using the RUN (Reserve Unique Name) form on the MCA portal.
• Name must contain “Nidhi Limited”.

3. Draft MOA & AOA

• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) stating the company’s objectives.

4. Incorporation Filing

• File the SPICe+ Form (INC-32) with MCA along with documents.
• Upon approval, receive Certificate of Incorporation (COI).

5. PAN, TAN & Bank Account

• Apply for PAN and TAN.
• Open a company current account in a recognized bank.

6. Apply for Nidhi Status

• Within 1 year, comply with post-incorporation norms:
  • Minimum 200 members.
  • Net Owned Fund (NOF) of ₹10 lakhs.
  • Unencumbered term deposits of 10% or more of outstanding deposits.

Documents Required for Nidhi Company Registration

Here’s a checklist of essential documents:

For Directors and Shareholders:

• PAN Card
• Aadhaar Card
• Passport-size photograph
• Address proof (Electricity bill/Bank statement)
• Identity proof (Voter ID/Passport/Driving License)

For Registered Office:

• Rent agreement (if rented)
• NOC from the owner
• Electricity/Utility bill (not older than 2 months)

Restrictions on Nidhi Companies

A Nidhi Company is not allowed to:

• Deal in chit funds, hire-purchase, leasing, insurance, or securities.
• Accept deposits from or lend to non-members.
• Open branches without meeting certain financial criteria.
• Advertise for deposits publicly.