Easy process to Register a Nidhi company

About Nidhi Company

Nidhi Company means a Company which has been incorporated as Nidhi with the object of saving public fund and receiving deposits from and lending to its members for their mutual benefits. The principal source of funds is the contribution from members. Nidhi is established mainly for creating the habit of savings amongst its members.

Nidhi in India context means “TREASURE”. Nidhi Company is a special class of company with certain restrictions related to its object, membership, share capital, net owned fund and deposit.

Requirements of Nidhi company

  • Nidhi company to be incorporated Under the Act shall be a Public company.
  • Minimum paid up equity share capital of Rs.500000.
  • Minimum numbers of members should be Seven.
  • No. Preference shares shall be issued.
  • It shall have the word “Nidhi Limited” as part of its name.
  • After one year of commencement of these rules ensure that company has minimum number of members should be 200.

Benefits of Nidhi Company

Separate legal entity

Accordance to the Companies Act, the Company is legal entity. Company can own property and take debt from its member for run the business. The members of a Nidhi company have no liability to the creditors of a Nidhi company.

Perpetual succession

Perpetual succession means continued existence. A Nidhi company has continued existence until any legally cause will be accrue. In simple, means legally dissolved. Nidhi Company have not affected by the death of its members or directors.

Create saving

Nidhi Company can acts as a mini bank. Save members savings and does work for its Members. In Nidhi Company members can deposits their funds in Saving Account, Fixed Deposit Account and Recurring Deposit Account.

Simple Management

The Board of Management of a Nidhi company can be easily changed by filing simple forms with the Registrar of Companies. The Board of Management of a Nidhi company controls the activities of the Nidhi Company.

Limited Liability

The liability of the shareholder is only up to the amount that they invested in the company. Limited liability protects the personal wealth of a Nidhi Company's Member, and does not put personal assets at risk.


There are many allowances and tax deductible costs that can be offset against the profits of a company and the tax would be paid after deducting many costs incurred by director. In addition to that the current level of Corporation Tax is lower than income tax rates.

Borrowing Capacity

The Company enjoys better route for borrowing of funds through the members. Nidhi Company can take deposits from Members by way of Saving Deposit Account, Fixed Deposit Account, Recurring Deposit Account and can borrow from Company Directors and its Relatives as per the list provided in the Companies Act and Banks and Financial Institutions.


1 At the end of Financial Year Annual Filling must be file to the Registrar of Companies. Half Yearly Returns has to be filed at ROC. 1 Nidhi Company shall not issue preference shares.
2To hold the Annual General Meeting once in a financial year. 2A body corporate and trust can not be member of nidhi company.
3 Net Worth of the company should not be less then Rs.10,00,000 3 No, current account with the members can be open by the nidhi company.
4 After the incorporation nidhi company shall increase minimum number of members to 200 within one year. 4 Nidhi company cannot pledge any of assets lodged by its members as security.
5 Nidhi company can give loan against the securities of :
  • Gold
  • Silver
  • Jewellery
  • Immovable Property
5 Nidhi company can not carry on the following business:
  • Chit fund
  • Hire purchase finance
  • Leasing finance
6Nidhi Company may open up to 3 branches only within the one district. 6 Nidhi Company can open branch only if it earns net profit during the 3 preceding financial year.


Nidhi Company is a company which is a public company and which is incorporated with main object of saving funds. In legal sense, they are created mainly for cultivating the habit of thrift and savings amongst its members.

No, Nidhi Company can’t do following business:
  • Chit fund
  • Hire purchase finance
  • Leasing finance
No, neither a body corporate nor trust becomes member of Nidhi Company.
In that case, preference shares are to be redeemed in accordance with the terms of issue of such shares.
No, Nidhi Company cannot accept deposits from any other person other than its Members.
No, a minor cannot admitted as a member of Nidhi Company but deposits can be accepted in the name of minor , if they are natural or legal guardian who is a member of Nidhi Company..
No, Nidhi Company does not require reserve bank of India approval to register in India.
In Nidhi Company minimum 3 directors are required and maximum number of director shall not be more then 15.
Nidhi Company shall accept fixed deposits for a minimum period of 6 months and a maximum period of 60 months.
Recurring Deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months.

The following documents are needed:

  • Pan Card
  • ID Proof ( Voter ID, Adhar Card, Driving License or Passport)
  • Address Proof (Latest Electricity Bill, Water Bill, Telephone Bill or Bank Statement)
For Becoming a member of Nidhi, a person should have to acquire/purchase at least a minimum of 10 equity shares or shares equivalent to Rs.100/-.
No, Nidhi Company can grant loan to its members only as the main purpose of the Nidhi is to create the habit of savings amongst the member for their mutual benefit.
A Nidhi shall give loans to its members only against the following securities, namely
  • Gold
  • Silver
  • Jewellery
  • Immovable Property.
  • Fixed Deposit Receipts (FDR)
  • National Savings Certificates (NSC)
  • Government Securities
  • Government Insurance Policies.


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