Nidhi Company Registration in India is a popular option for businesses aiming to promote savings and lending habits among members. Governed under the Companies Act, Nidhi Companies are a type of Non-Banking Financial Company (NBFC) with special exemptions and simpler compliance. This Saving Mantra guide explains what a Nidhi Company is, its benefits, eligibility, and the complete step-by-step registration process in India.
What is a Nidhi Company?
A Nidhi Company is a company incorporated under the Companies Act, 2013, formed to:
- Encourage savings among members
- Accept deposits from members only
- Lend money to members only
Nidhi Companies are regulated by the Ministry of Corporate Affairs and governed by the Nidhi Rules, 2014. They are not regulated by the RBI for day-to-day operations.
Key Features of a Nidhi Company
- Deals only with its members
- Cannot accept deposits from the public
- Cannot issue preference shares or debentures
- Uses “Nidhi Limited” as a mandatory suffix
- Operates on mutual benefit principles
Benefits of Nidhi Company Registration
- ✔ Simple registration compared to NBFCs
- ✔ No RBI approval required
- ✔ Promotes financial inclusion
- ✔ High trust among members
- ✔ Limited liability for members
Eligibility Criteria for Nidhi Company Registration
To register a Nidhi Company:
- Minimum 7 members required
- Minimum 3 directors required
- Minimum paid-up equity share capital: ₹10 lakh
- Directors must be Indian citizens
- Clear object clause in MOA for Nidhi activities
Documents Required for Nidhi Company Registration
- PAN & Aadhaar of directors
- Passport-size photographs
- Proof of registered office address
- Electricity bill / Rent agreement
- Digital Signature Certificate (DSC)
- Director Identification Number (DIN)
Step-by-Step Process for Nidhi Company Registration in India
Step 1: Obtain DSC & DIN
Apply for Digital Signature Certificates and Director Identification Numbers for all directors.
Step 2: Name Approval
Apply for name approval through SPICe+ with “Nidhi Limited” as suffix.
Step 3: Draft MOA & AOA
Prepare Memorandum and Articles of Association as per Nidhi Rules.
Step 4: Company Incorporation
File SPICe+ forms with the Registrar of Companies.
Step 5: Certificate of Incorporation
Once approved, the ROC issues the Certificate of Incorporation.
Step 6: Post-Incorporation Compliance
Within 1 year, the company must:
- Have at least 200 members
- Maintain Net Owned Funds of ₹10 lakh
- File NDH-1 form
Post-Registration Compliance
- NDH-1 (Annual return of members)
- NDH-3 (Half-yearly return)
- Annual ROC filings (AOC-4, MGT-7)
- Statutory audits
Restrictions on Nidhi Companies
A Nidhi Company cannot:
- Open branches outside the state without approval
- Advertise deposit schemes
- Provide loans to non-members
Penalties for Non-Compliance
Non-compliance may lead to:
- Heavy monetary penalties
- Restriction on operations
- Cancellation of Nidhi status
Why Choose Saving Mantra?
- ✔ End-to-end Nidhi registration support
- ✔ Expert MOA & AOA drafting
- ✔ Affordable and transparent pricing
- ✔ Post-registration compliance assistance
Disclaimer
This blog is for informational purposes only and does not constitute legal or financial advice. Rules, fees, and compliance requirements may change as per government notifications. Readers are advised to consult professionals or the Ministry of Corporate Affairs before proceeding.
Conclusion
Nidhi Company Registration in India is an ideal structure for mutual benefit and member-based financial activities. With simplified rules and no RBI approval requirement, it is a preferred option for community-based savings institutions. Saving Mantra ensures smooth registration and full compliance at every stage.