What is a Nidhi Company?

A Nidhi Company is a type of Non-Banking Financial Company (NBFC) recognized under Section 406 of the Companies Act, 2013, created to promote saving habits, thrift, and financial lending among its members. Unlike traditional NBFCs, Nidhi Companies deal exclusively with their own members, accepting deposits and providing loans for mutual benefit.

Nidhi Companies are regulated by the Ministry of Corporate Affairs (MCA) and exempt from strict RBI licensing, making them an attractive option for small-scale, community-driven financial institutions. With low risk and simple compliance requirements, they are commonly used in rural and semi-urban areas to build micro-savings and lending communities.

✅ Benefits of Nidhi Company Registration
🎯 Provide 7 strong benefit points, written from the client’s perspective.

1️⃣ Legally operate as a member-based deposit and lending institution
2️⃣ No RBI approval required, making it easier to start
3️⃣ Cost-effective method to promote community savings
4️⃣ Increased trust and transparency through regulated operations
5️⃣ Separate legal identity offers limited liability to members
6️⃣ Easy to raise funds from within the community
7️⃣ Simplified compliance compared to other NBFCs

📑 Documents Required for Nidhi Company Registration
📂 List all required documents with relevant emojis and brief explanations.

1️⃣ 🧾 PAN Card – Identity proof of all directors and shareholders
2️⃣ 🪪 Aadhaar Card – Address proof of proposed directors and members
3️⃣ 📸 Passport-size Photos – Recent photos of all directors
4️⃣ 🏠 Address Proof – Utility bill or rent agreement for registered office
5️⃣ 📝 MOA & AOA – Drafted to define the objective of operating as a Nidhi Company
6️⃣ 🔏 Digital Signature Certificate (DSC) – Required for e-filing of forms

👤 Eligibility for Nidhi Company Registration
🧾 Explain in detail who is eligible or required to avail of this service.

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

• A minimum of 7 members is required (3 must be directors)

• Must be incorporated as a public limited company under Companies Act, 2013

• All members must be individuals (no corporate members)

• Company must add "Nidhi Limited" as part of its name

• Should not engage in chit funds, leasing, hire purchase, or insurance business

• Must comply with Nidhi Rules, 2014 and MCA guidelines

🔄 Process of Getting Nidhi Company Registered
🔁 Provide a step-by-step explanation of how the service is executed from start to finish.

1️⃣ Obtain DSC & DIN – Get Digital Signatures and Director Identification Numbers for directors
2️⃣ Company Name Reservation – Apply for name using RUN (Reserve Unique Name) service
3️⃣ Draft MOA & AOA – Define objectives and internal rules in line with Nidhi Company norms
4️⃣ File SPICe+ Form – Submit incorporation application to MCA along with required documents
5️⃣ Receive Incorporation Certificate – Get Company Identification Number (CIN) and PAN
6️⃣ Post-Incorporation Compliance – Open a bank account, appoint auditor, and file NDH-1 within 90 days

⏱️ Timeline for Nidhi Company Registration
⏳ Mention the approximate time it takes to complete the service.

The complete process of registering a Nidhi Company typically takes 15–25 working days, depending on:

• Name approval from MCA

• Submission and verification of documents

• Speed of incorporation by Registrar of Companies

• Timely compliance with NDH filings post-incorporation

❓ Frequently Asked Questions (FAQs) about Nidhi Company Registration

1️⃣ Is RBI approval required to start a Nidhi Company?
No. Nidhi Companies are exempt from RBI registration and are governed by MCA under Nidhi Rules, 2014.

2️⃣ Can a Nidhi Company lend money to outsiders?
No. Nidhi Companies can only accept deposits and give loans to their registered members.

3️⃣ How many members are required to form a Nidhi Company?
A minimum of 7 members (including 3 directors) is required at the time of incorporation.

4️⃣ Is it necessary to add "Nidhi Limited" in the company name?
Yes. As per the law, all Nidhi Companies must use "Nidhi Limited" as part of their legal name.

5️⃣ What is the minimum capital requirement for a Nidhi Company?
A minimum paid-up equity capital of ₹5 lakh is required at the time of registration.

6️⃣ Can a Nidhi Company open branches?
Yes, after 3 years of operations and with profits in three consecutive years, branches can be opened.

7️⃣ Are Nidhi Companies allowed to issue preference shares?
No. Nidhi Companies can only issue equity shares.

8️⃣ Is audit mandatory for Nidhi Companies?
Yes, Nidhi Companies must appoint a statutory auditor and file annual financials.

9️⃣ Can NRIs become members or directors in a Nidhi Company?
No. Only resident Indian individuals can become members or directors.

🔟 What are the compliance requirements after registration?
Filing of NDH-1 (within 90 days), maintaining a minimum of 200 members within 1 year, and adhering to deposit limits and ratios are required.