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. It is formed with the purpose of cultivating the habit of thrift and savings among its members and can only accept deposits and provide loans to its members.

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Benefits of a Nidhi Company

Simplified Financial Model: Operates only among members, reducing credit risk.
No RBI Approval Required: Registered with the MCA, not regulated by RBI for core operations.
Encourages Savings & Loans: Promotes the habit of thrift and savings among members.
Limited Liability: Members’ liability is limited to their share capital.
Separate Legal Identity: The company enjoys perpetual succession and can own property in its name.

Ideal For

Individuals wanting to create a mutual benefit society
Entrepreneurs looking to start a community-level finance business
Local groups and associations aiming to formalize their lending and deposit systems
Small businesses or co-operatives seeking to promote self-help and savings culture

Incorporation Process

Name Reservation (SPICe+ Part A)
Filing of name reservation application through MCA for Nidhi Company.
Document Preparation
Drafting of MoA, AoA, and declaration forms along with KYC documents of all directors and members.
Company Incorporation (SPICe+ Part B)
Submission of digital incorporation forms along with PAN, TAN, and bank account setup.
Post-Incorporation Compliance
Filing of NDH-1 and NDH-3, ensuring compliance with member requirements, net owned funds, and deposit limits.
Ongoing Compliance & Advisory
Filing of annual returns, financials, and adherence to Nidhi Rules.

Documents Required

PAN & Aadhaar of all directors and shareholders
Passport (for foreign nationals, if any)
Utility bill or bank statement for current address proof
Proof of registered office (rent agreement, NOC, utility bill)
Passport-size photos of directors
Digital Signature Certificates (DSC)
Director Identification Number (DIN)

What You’ll Get

Certificate of Incorporation
Company PAN & TAN
DIN & DSC for all directors
MoA & AoA tailored for Nidhi operations
Support with initial NDH filings (NDH-1, NDH-3)
Ongoing regulatory guidance under Nidhi Rules

Frequently Asked Questions

Have a look at the answers to the most asked questions

Can a Nidhi Company operate like a bank?

No. A Nidhi Company can only accept deposits and provide loans to its members. It cannot deal with non-members or perform banking activities like issuing cheques or credit cards.

How many members are required to start a Nidhi Company?

You need at least 7 members and 3 directors to incorporate, and within 1 year, the company must have 200 members.

What is the minimum capital requirement?

A Nidhi Company must start with a minimum paid-up capital of ₹10 lakhs.

Does a Nidhi Company require RBI approval?

No, RBI approval is not required as Nidhi Companies are exempted from core RBI regulations.

Can a Nidhi Company open branches?

Yes, after 3 years of continuous profit-making and subject to compliance, it can open branches within the same district or state.