Nidhi Company Registration

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Nidhi Company Registration

You think lady’s kitty is all about fun, games, chit-chats and gossips? Well, this is not the case. With the idea of this they have cultivated a habit of saving among its members. Same is being done by Nidhi Company Registration but in more organized & legalized way. One of the simple and easy option to start a borrowing and lending business in India without obtaining RBI approval is Formation of Nidhi Company, Such Nidhi Company Incorporation accepts deposits and provide loans only to their members, it is prohibited from dealing with non-members. Know more about Registration of Nidhi Company here and if you have any question, book a consultation with our Nidhi Company Experts at Compliance Calendar LLP.

Definition: -

Nidhi means a Company which has been incorporated as a Nidhi:

“Nidhi” or “Mutual Benefit Society” means a company, which the Central Government may by notification in the Official Gazette, declare to be a Nidhi or Mutual Benefit Society, as the case may be. A Nidhi company is a type of company in the Indian non-banking finance sector, recognized under section 406 of the Companies Act, 2013 & their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Along with Companies Act, 2013, these companies are regulated under the Nidhi Rules, 2014 issued by the Ministry of Corporate affairs.


  • Chapter XXVI of Companies Act 2013
  • Section 406
  • Nidhi Rules, 2014
  • Nidhi Amendment Rules, 2022 w.e.f. 19th April, 2022

The primary object of Nidhi Company is to carry on the business of accepting deposits and lending money to member, borrowers (against jewels) and mortgage of property etc. For over a century Nidhis, with the objective of cultivating the habit of thrift, generally promoted by public spirited men drawn from affluent local persons, lawyers and professionals like auditors, educationists, including retired persons etc. The area of operation was local – within municipalities and panchayats. The functions of a Nidhi company are similar to a bank, but the difference lies in the approach. The funding process starts when the members start contributing funds to the company. Those funds are later used to provide loans to the members.

The principle of mutual benefit has been incorporated to pool the savings from members and lend only to members and never have dealing with non-members. Nidhis were not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures. As stated, these Nidhis do their business only with Members. Such Members are only individuals. Bodies Corporate or Trusts are never to be admitted as Members in these companies. Nidhi companies are effectively non-banking financial companies and are engaged in the business of accepting deposits and making loans to their members. The deposit taking activities of Nidhis are governed by the RBI Act and guidelines made thereunder.


Pre-requisites for Incorporation as a Nidhi Company: -

  • Shall be a public Company;
  • Shall have Minimum 3 Directors and 7 Shareholders for formation;
  • Shall have minimum paid up capital of Rupees Ten Lakhs (Rs. 10,00,000/-) (*as per Nidhi Amendment, Rules 2022, prior to amendment it was Rupees Five Lakhs [Rs. 5,00,000/-] ;)
  • Shall have the last words “Nidhi Limited” as a part of its name; and
  • Such Company shall not issue preference shares.

Documents Required of Nidhi Company Registration Registration

  • Proof of Registered Office Address: - Copy of Utility bill not older than 2 months along with NOC and Proof of Office Address: Conveyance Deed/ Lease Deed/ Rent Agreement etc. along with rent receipts;
  • Proof of First Directors and Subscribers not having DIN: - Proof of Identity (Voters Identity Card/ Driving License/ Passport); Proof of Address (Latest Bank Statement/ Telephone Bill/ Mobile Bill/ Electricity Bill); and PAN Card;
  • DIR-2 (Consent to Act as Director of the Company) & Interest of such Directors in other entities;
  • Other Declarations required as per Applicable Rules.

Checkpoints for Spice+ MOA:

  • Main Objects and Incidental or Ancillary Objects;
  • The Main Object should be cultivating the habit of thrift and saving amongst its members & receiving deposits from, and lending to, its members only, for their mutual benefit;
  • Authorised Share Capital of the Company;
  • Details w.r.t Subscribers and Number of Shares Subscribed by them;
  • Details w.r.t Professional witnessing the E-Form.

Checkpoints for Spice+ AOA:

  • E-AOA has option of adding, modifying, and deleting Articles; Table F, Schedule-1 of Companies Act, 2013 is applicable in case of Company Limited by shares;
  • Details w.r.t Subscribers;
  • Details w.r.t Professional witnessing the E-Form.

(*In case number of Subscribers are more than Seven then physical copies of MOA & AOA needs to be attached)

Checkpoints for Agile Pro-S (INC-35):

Purpose of Form:

Application for GSTIN (Optional); EPFO, ESIC, Professional Tax (Mandatory for Companies registered in Maharashtra, West Bengal and Karnataka); Opening of Bank Account; Shop and Establishment Registration Number (only for Delhi location);

  • Specimen Signature of Authorised Persons for registration with EPFO;
  • Proof of Identity and Address of Authorised Director for opening of Bank Account;
  • Passport size photograph of First Directors;

Checkpoints for Form INC-9: -

Purpose: Form for Declaration by First Subscribers & Directors as per applicable Rules;


It is Web Based Auto Generated Form (In case if total number of subscribers and/ or directors exceeds twenty (20) and / or any such subscriber/ director has neither DIN/ PAN then it is required to be attached to Spice+ Part B)

Spice+ is the Web based Form which is required to be filled online, once all the details are filled, the E-Forms can be downloaded by clicking on download icon for affixing DSC’s and then such Forms can be uploaded like Normal other E-Forms after making payment of requisite fees.

Features & Benefits of Nidhi Company Registration Registration

  • Nidhi Companies are mutual benefit societies, because their dealings are restricted only to the members;
  • Membership is limited only to individuals; Body Corporate cannot become its members;
  • The principal source of funding is contribution from the members and loans are given to the members at relatively reasonable rates;
  • Suitable for fulfilling the Financial Requirements of lower and middle income groups;
  • Deposits mobilized by Nidhis are not much when compared to organized banking sector;
  • As Nidhi Companies deal with Shareholder- members only, RBI has exempted the notified Nidhi’s from the core provisions of RBI Act.

Frequently Asked Questions

Restrictions/ Prohibitions: - No Nidhi Shall:-

  • Carry Business as: -
    • Chit Fund;
    • Hire Purchase Finance;
    • Leasing Finance;
    • Insurance; or
    • Acquisition of Securities issued by any body corporate.;
  • Issue: -
    • Preference Shares;
    • Debentures; or
    • Any debt instrument.;
  • Open any Current Account with its members;
  • Acquire another company by
    • purchase of securities,
    • or control the composition of the Board of Directors;
  • Carry on any business in its own name other than the business of borrowing or lending;
  • *Nidhi may provide locker facilities on rent to its members, provided rental income from such facilities shall not exceed 20% of the gross income of the Nidhi at any point of time during a financial year;

  • Accept deposits from or lend to any person/ body corporate, other than its members;
  • Pledge any assets kept as security by its members;
  • Enter into any partnership arrangement in its borrowing/ lending activities;
  • Issue/ Cause to issue any advertisement in any form for soliciting deposits;
  • Pay brokerage/ incentive for mobilizing deposits from members/ for deployment of funds/ for granting loans;

As per Rule 8 of Nidhi Rules, 2014

  • Only an individual who is major can become its member; Minor shall not be admitted as its member.
  • (*Deposits may be accepted in the name of minor, if they are made by natural or legal guardian who is member of Nidhi)

  • Body Corporate or trust shall not be admitted as a member of Nidhi;
  • For Formation of Nidhi – There must be minimum seven members out of which three members shall be Directors, Post Formation it must ensure that the number of members are increased to two hundred (200) and Nidhi shall ensure that its membership is not reduced below two hundred (200) at any point of time;

Rule 17 of Nidhi Rules, 2014 As per the said rule, the Director shall be member of Nidhi;

Every Nidhi shall within a period of 120 days ((*as per Nidhi Amendment, Rules 2022, prior to amendment it was 1 year ;) from the date of incorporation ensure that: -

Absolutely, because these companies are directed Companies Act, 2013, rules made thereunder, Ministry of Corporate Affairs of India & RBI

  • Every Nidhi shall issue fully paid-up equity shares of the nominal value of not less than ten rupees each.
  • No service charge shall be levied for issue of shares.
  • Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees: It may be noted that a savings account holder and a recurring deposit account holder shall hold at least one equity share of rupees ten.
  • A Nidhi shall not admit a body corporate or trust as a member.
  • Every Nidhi shall ensure that its membership is not reduced to less than two hundred members at any time.
  • A minor shall not be admitted as a member of Nidhi. It may be noted that deposits may be accepted in the name of a minor if they are made by the natural or legal guardian who is a member of Nidhi.

Nidhi Company shall not –

  • (a) carry on the business of chit fund, hire purchase finance, leasing finance, insurance or acquisition of securities issued by any body corporate;
  • (b) issue preference shares, debentures or any other debt instrument by any name or in any form whatsoever;
  • (c) open any current account with its members;
  • (d) acquire another company by purchase of securities or control the composition of the Board of Directors of any other company in any manner whatsoever or enter into any arrangement for the change of its management, unless it has passed a special resolution in its general meeting and also obtained the previous approval of the Regional Director having jurisdiction over such Nidhi;
  • (e) carry on any business other than the business of borrowing or lending in its own name.
  • (f) accept deposits from or lend to any person, other than its members;
  • (g) pledge any of the assets lodged by its members as security;
  • (h) take deposits from or lend money to any body corporate;
  • (i) enter into any partnership arrangement in its borrowing or lending activities;
  • (j) issue or cause to be issued any advertisement in any form for soliciting deposit.
  • It may be noted that private circulation of the details of fixed deposit Schemes among the members of the Nidhi carrying the words “for private circulation to members only” shall not be considered to be an advertisement for soliciting deposits.

  • (k) pay any brokerage or incentive for mobilizing deposits from members or for deployment of funds or for granting loans.

Nidhi Companies which have adhered to all the provisions of these rules may provide locker facilities on rent to its members subject to the rental income from such facilities not exceeding twenty per cent of the gross income of the Nidhi at any point of time during a financial year.

We being the professional firm understand the requirement of its clients and helps them to achieve their goals. Give wings to your dreams by registering your Nidhi Company today. Let’s encourage the members to save money and invest them within the company that whenever they are short of funds they can approach & borrow them from your Nidhi Company. If you have any questions, feel free to mail us at or connect at 9988424211.