Nidhi Company Registration Process in India | Procedure [2020] - Onfiling
Special Corporate

Nidhi Company


What is Nidhi Company?

As per the Companies Act, 2013, Nidhi Company features a sole objective of cultivating the habit of thrift and savings amongst its members. In Nidhi Company, it is allowed to take a deposit from its members and lend to its members only. Hence, the funds contributed to a Nidhi company are only from its members and used only by the shareholders of the Nidhi Company.

Nidhi Company is a classification of NBFCs and RBI and is empowered to issue directions to them in matters concerning their deposit acceptance activities. However, in recognition of the very fact that this Nidhi company deals with their shareholder-members only, RBI has exempted the notified Nidhi from the core provisions of the RBI Act and other directions applicable to NBFCs. Therefore, it is an ideal entity to take a deposit from and lend to a specific group of people.

What are the features of Nidhi Company?

Prohibited Activities

Activities like Chit Fund, Hire-Purchase Finance, Leasing Finance, Insurance, or Securities Business is strictly prohibited.

Number of Members

This establishes with 7 members as a public limited company, however, to obtain a Nidhi Company Status it needs at least 200 members in a year.

Capital Requirement

For Nidhi Company Status, the minimum paid-up equity capital required is Rs. 10,00,000 held by at least 200 members.

Unique Name

The name of the company should be unique, and it must not be the same or similar to the name of any existing company or a trademark.


  • RBI Regulations
  • Nidhi Company does not deal with the funds other than their members; hence the RBI regulations are limited as compare to other companies.

  • Low Capital Requirement
  • Nidhi Company has minimum capital requirement of INR 5 lakhs.

  • Easy formation
  • There is no need of obtaining a license from RBI, they just need to register as a public company with the Ministry of Corporate Affairs.

  • No intervention
  • The sole purpose of forming this company is to provide benefits only to its members, hence the outsider is not allowed to intervene the working of Nidhi Company.


  • Restriction to raise funds
  • As Nidhi Company is limited to its members only so they can’t accept deposits from outsider. Due to this, it has limited fund raising power.

  • RBI vigilance
  • Nidhi Company does not have any strict compliances, but their activities are governed by the RBI especially their deposit acceptance operations.

  • Rules and Regulations
  • As the Central Government issues rules and regulations with regards to the Nidhi company so they are not totally exempted from the regulatory framework of Government.

What is the registration process of Nidhi Company?


Application process for Company Incorporation is filed online, the process starts with the issuance of Digital Signatures of class two.


For issuance of the certificate, one single application (spice 32) is filed for incorporation of the company with the approval of this, the Certificate is issued.


The application for Nidhi Status is filed when the net worth of the company is over Rupees Ten Lacs and the minimum no. of member is 200.

What is the common registration process of Nidhi Company?


The name must be unique and Nidhi Company must end with “Nidhi Limited”. It should not be the same or similar to an existing company.


Following provisions are applicable to Nidhi Companies. 1. As they are incorporated into the nature of Public Company so rules and regulations of Companies Act, 2013 are applicable. 2. RBI provisions related to Interest rate payable on deposit are applicable to Nidhi Companies. But the core provisions of RBI aren’t applicable to Nidhi Companies as RBI has exempted the Nidhi Companies. 3. Nidhi Rules, 2014.
Once the Nidhi Company is incorporated it must fulfill the following requirements: 1. It must have at least 200 members/shareholders. 2. Minimum Net Owned Fund should be Rs. 10 Lakhs. 3. Unencumbered term deposit must be at least 10% of the term deposit. 4. The ratio of Net Owned Fund to term deposit should not be less than 1:20.
The Nidhi Company uses the funds in lending to shareholders as per Nidhi Rules. It lends such money in the form of small loan for business and finance.
Nidhi Companies are not allowed to do the following business: 1. They are not allowed to start the business of chit funds, Insurance, Hire Purchase Finance, Leasing Finance and acquisition of shares issued by companies. 2. Nidhi Company cannot issue securities such as preference shares, debentures etc. 3.They are prohibited from opening any current account with its members. 4. It cannot enter into partnership for doing lending and borrowing business. 5. It is not allowed to acquire any other company.
Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan.
Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.
Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. And the Nidhi Company compulsorily abide by the principles of Central Government.
As to incorporate a Nidhi Company it is to be registered as a Public Limited Company. So, to incorporate a Nidhi Company it is necessary to fulfill following criteria: 1. It should have at least 3 Directors. 2. It should have at least 7 Members. 3. The main objective to be written in the MOA should be to cultivate the habit of thrift and savings among its members. And it can accept deposits and lend money only to its members and shall work for the advantages of its members.
Following are the documents required for Nidhi Company Registration: 1. Digital Signature Certificate of all the Directors. 2. Directors Identification of all the Directors. 3. Copy of a PAN Card. 4. Copy of Identity Proof (i.e. Voters ID Card, Driving License, Aadhar Card). 5. 2 Passport size photograph. 6. Registered Office Address Proof (Electricity Bill, Telephone Bill). 7. If the registered address is a rented premise then rent agreement with rent receipt.
The exclusive advantage which is offered by Nidhi Companies are: 1. It is a single office institution governed exclusively by its members with no involvement of the third party. 2. Provide loans at minimal interest rates and minimum documentation. 3. Secured investments are guaranteed by such companies.
A Nidhi Company is a Company which carries on the business of accepting deposits and lending the same on demand. It is similar to NBFC but the basic difference between the two is that Nidhi Companies accept deposits only from its members. The main objective of these companies is to work for the mutual benefit of its members. These companies aren’t entitled to hold on the business of Hire Purchase Financing, Insurance, Chit Funds, and Acquisition of securities or Issue of any Debt Instruments.

List of Documents

  • Signed Declaration (s) from Promoters
  • Utility Bill as proof must be Latest
  • Identity Proof of each Promoter
  • NOC from the owner of premises
  • Proof of Registered Office
  • Scanned Photographs of Promoters
  • Address Proof of Promoter
  • PAN Card of Each Promoter

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Disclaimer : 1) Class 2 digital signature from eMudhra with 2 year validity along with ePass 2003 token. 2) Statutory Auditor fee is payable on actuals directly to the Independent Auditor appointed by the Board of Directors. Onfiling will only be responsible for accounting, preparation of financial statements and filing of returns on behalf of the Company. 3) Upto 4 name options can be given in 1 RUN name approval request. 4) Additional Directors can be added for an additional price of Rs.999 - if DSC & DIN is available. In case no DIN or DSC is available, cost for adding additional Director will be Rs.1999, inclusive of GST. 5) Authorised capital is the amount of shares a company can issue at anytime and can be increased further in the future. Paid-up capital is the amount invested by shareholder and can be even Rs.2. 6) Additional authorised capital can be purchased if required at time of incorporation 7) In case of incorporation in Madhya Pradesh, an additional stamp duty of Rs.7550 will be applicable. In case of incorporation in Punjab, an additional stamp duty of Rs.15025 will be applicable. In case of Kerala, an additional stamp duty of Rs.3025 will be applicable.

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