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How to Register Nidhi Company in India | Enterslice


A Nidhi Company is a kind of Non-Banking Financial Company (NBFC) which does not require any license from RBI. This type of Company is incorporated under Section 20A of the Companies Act 1956 and is governed by the Ministry of Corporate Affairs (MCA). It is formed to borrow and lend money to its members. The main idea behind the Nidhi Company Registration is developing the habit of savings among its members for mutual benefits. The primary source of funding for Nidhi Companies is the contributions made by the members of the Company. Nidhi Companies are largely famous in the Southern part of the country.

Nidhi Company is registered as a Public Company and should have “Nidhi Limited” as the last words of its name.

Documents Needed to Register a Nidhi Company

  • Rent/Lease agreement of the registered place of business.
  • A No Objection Certificate signed by the owner/landlord
  • Address proofs of the members of the Company
  • Identity proofs of the members
  • Copies of PAN Cards of the members
  • Digital Signature (DSC)
  • Direct Identification Number (DIN) of the Directors
  • Memorandum of Association of the Company (MoA)
  • Article of Association of the Company (AOA)

Forms to be filed for Nidhi Company registration

  • INC 9: This form is to be filed by all the subscribers of the Memorandum of Association (MOA)
  • DIR 2: This form is to be filed by all the directors of the Company, a declaration as per rule 5&6 of Nidhi rules 2014. This form needs to be signed by all the subscribers of the Company.

Incorporation of Nidhi Company

  • Generally, Nidhi Company is incorporated as a Public Limited Company.
  • A Nidhi Company should have at least 200 members within one year of its incorporation.
  • Moreover, for a Nidhi Company, the net owned funds within one year of its existence should be minimum Rs. 10 lakhs or more. The ratio of net owned funds to that of deposit should not be more than 1:20.

Prohibited Activities for a Nidhi Company

  • A Nidhi Company cannot undertake the business of hire purchase, chit fund, acquisition of securities or insurance.
  • Nidhi Companies cannot issue preference debentures or shares.
  • These companies are not allowed to open the current account of the company member
  • A Nidhi Company cannot issue any type of advertisement
  • A Nidhi Company is not permitted to enter into any kind of agreement or pay brokerage to implore any kind of deposits

Advantages of incorporating a Nidhi Company

A number of benefits can be availed by registering as a Nidhi Company; some of the benefits are as follows:
  • Cost-efficient Registration: The minimum capital requirement for the registration of a Nidhi Company is Rs 5 lakhs, where you have the opportunity to invest the capital within the 2 months after the registration also, by merely paying the registration fees
  • No Regulations of RBI:  Nidhi company comes under the category of NBFC, however, it does not require approval from RBI.RBI exempted Nidhi Companies from following stringent compliances, unlike other NBFCs.
  • Low Risk: In Nidhi Companies, the risk of non-repayment of loans is less as compared to other businesses. Nidhi Companies accept deposit and provide loans as per the Nidhi Rules, 2014. This lowers the risk of fraud.
  • Nidhi Company Software: Nidhi Companies come with an extremely user- friendly software known as Nidhi Company Software at reasonable prices. All the business-related activities of the company are managed through this software.
Also, read: Rules Regarding Nidhi Company Setup in India
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Location: India

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