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Nidhi Company Registration
Mutual benefit society for borrowing and lending among members.
Incorporation as Public Limited (Nidhi)
Minimum 7 members and 3 directors
Minimum equity capital of ₹10 lakh
Compliance with Nidhi Rules, 2014
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About Nidhi Company Registration
A Nidhi Company is a non-banking financial entity governed by Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014. It is incorporated as a public limited company with the object of cultivating the habit of thrift and savings amongst its members and accepting deposits from — and lending to — its members only.
Nidhi companies must achieve specific financial benchmarks (≥ 200 members and ≥ ₹20 lakh net-owned funds) within one year of incorporation to retain Nidhi status.
Key Features
Mutual Benefit — Borrowing and lending only among members — ‘closed loop’ finance.
Lower Regulation — RBI directives on NBFCs do not apply; governed by Companies Act + Nidhi Rules.
Limited Liability — Members’ liability is limited to share capital.
Local Reach — Suitable for community-based mutual finance in tier-2/tier-3 cities.
Frequently asked
Common questions about Nidhi Company Registration.
A Nidhi Company is a type of Non-Banking Financial Company (NBFC) registered under the Companies Act, mainly formed to encourage savings and lending among its members.
The main purpose is to promote thrift and savings habits among members and provide loans to members only.
No, a Nidhi Company is not a bank. It is a mutual benefit financial institution regulated by MCA rules.
Minimum 7 members and 3 directors are required to start a Nidhi Company.
No, Nidhi Company requires multiple members and directors.
It is registered through MCA by incorporating a Private Limited Company first, then applying for Nidhi status after meeting conditions.
No, RBI approval is not required. It is regulated by the Ministry of Corporate Affairs.
Minimum paid-up capital requirement is ₹10 lakh.
Yes, incorporation and compliance filings are done online via MCA portal.
It usually takes 15–30 days depending on approvals and compliance checks.
No, deposits can only be accepted from members.
Only individuals can become members; companies and institutions cannot join.
Yes, but only to its members.
Loan limits depend on deposit base as per Nidhi Rules (typically 2–20 times of net owned funds).
Yes, but branch expansion is subject to compliance and net owned fund requirements.
ROC filings, NDH returns, financial statements, and income tax returns are mandatory.
Yes, statutory audit is mandatory every financial year.
NDH-1 is filed to declare statutory compliance within prescribed timelines.
NDH-4 is used to apply for declaration as a Nidhi Company.
Heavy penalties, cancellation of Nidhi status, and regulatory action may occur.
Taxation is similar to other companies (around 22%–30% plus applicable surcharge and cess).
Yes, it can open current accounts for business operations.
Yes, but only from members and under prescribed limits.
Yes, interest is paid on member deposits as per company policy.
Direct conversion is not allowed; separate NBFC registration is required.
No, minimum membership must be maintained as per law.
Company may lose Nidhi status and face regulatory action.
Yes, but only to members and within prescribed limits.
No, KYC compliance is mandatory for all members.
No, shares are not publicly offered; membership-based structure only.
No, Nidhi Companies cannot be publicly listed.
No, it cannot function like a bank; it is strictly member-based lending institution.
No, investment schemes outside members are not allowed.
It becomes illegal and may face penalties and cancellation.
No, such activities are strictly prohibited under law.
Generally no, membership is restricted to Indian individuals.
Yes, but compliance requirements still apply.
No, misuse can lead to serious legal action and penalties.
Yes, mergers are allowed subject to MCA approval.
Yes, it can borrow from banks for business operations.
RBI does not regulate Nidhi Companies; MCA is the governing authority.
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