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Nidhi Company Registration

SAHU & ASSOCIATES: Nidhi is a Hindi word, which means finance or fund. Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.

What is a Nidhi Company?

A Nidhi Company is a public limited company which is formed with a sole purpose of accepting deposit and lending money only to its members. It is also an Non Banking Financial Company (NBFC) which has been exempted from the provisions of RBI.

To start a Nidhi Company in India the first step is to incorporate a Limited Company, under the Companies Act, 2013. Hence, a minimum of three Directors and seven shareholders will be required to start the Limited Company incorporation process. During incorporation of the Nidhi company, care must be taken to ensure that the object of the Limited Company mentioned in the Memorandum of Association is that of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

Nidhi company registration requires minimum 3 members. All the Nidhi company's incorporated shall have the last word as "Nidhi Limited" as part of its name. Nidhi company is easy and economical to register. Nidhi company registration can be done through Makemyregistration in Delhi NCR, Mumbai, Bengaluru, Chennai and other Indian cities.

Nidhi company requires minimum 3 members. It might not issue preference share. If preference shares have already been issued by a Nidhi Company before initiation of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares. All the Nidhi company's incorporated shall have the last word as "Nidhi Limited" as part of its name. Nidhi Company Registration is done through Makemyregistration.


- Highly dependent on the integrity, honestyand loyalty of workers and members.
- Lacklustre sales promotion.
- It caters to only the needs of small and medium-income groups.
- Nidhi Companies are usually managed by amateurs and professional managers cannot be hired due to lack of funds.
- People may be afraid to deposit funds because Nidhi Companies don't require a licence from the RBI.

Requirements for Nidhi Company

1. A Nidhi company that has to be incorporated under this Act shall be a public company;
2. It must have a minimum paid up equity share capital of Rs.5,00,000/-;
3. There will be no issuances of preference shares. If such shares had already been issued by a Nidhi Company before commencement of this Act, such preference shares are to be redeemed in accordance with the terms of issue of such shares;
4. The objective of such a firm would be to imbibe in the members a habit of thrift and saving and the services would only be restricted to its members;
5. The name must have Nidhi Limited


Step 1. Application of DSC & DPIN: First of all, the partners have to apply for Digital signature and DPIN for Nidhi company. Digital signature is an online signature used of filing and DPIN refer to Directors PIN number issued by MCA. If the directors already have DSC and DPIN, then this step can be skipped.

Step 2. Name approval: You have to provide 3 different name options for Nidhi company to MCA of which one will be selected. Names provided should ideally be unique and suggestive of company business

Step 3. MOA & AOA submission: Once the name is approved, one needs to draft Memorandum of association and Articles of Associate. But the object of the Nidhi company must always be a charitable object. Both MOA and AOA are filed with the MCA with the subscription statement.

Step 4. Get incorporation certificate: It typically takes 15- 25 days to form a Nidhi company and get the incorporation certificate. Incorporation certification is a proof that company has been creation. It also includes your CIN number.

Step 5. Apply for PAN, TAN and Bank account: Then you need to apply for PAN and TAN. PAN and TAN are received in 7 working days. Post this, you can submit the Incorporation certificate, MOA, AOA and PAN with bank to open your bank account.


- Minimum 7 shareholders
- Minimum 3 Directors
- Minimum Capital of Rs. 10 lacs
- DIN for all directors


- Minimum number of 200 Shareholders
- Net owned Fund shall not be less than Rs. 10 Lacs
- Unencumbered deposits of not less than 10% of the outstanding deposits
- Net owned funds to deposits ratio should be more than 1:20

Documents required for Nidhi Company Registration

For Directors/Shareholders

- Copy of PAN Card
- Aadhar Card
- Address Proof (Bank Statement, Mobile bill, Telephone bill)
- Passport Size Photo
- For Registered Office

Ownership Proof (Electricity bill etc)

- Utility Bill (Gas bill, Electricity bill)

Advantages of Nidhi Company

- Can accept deposits
- Less capital required
- Base to establish NBFC
- Best to finance business

Disadvantages of Nidhi Company

- Cannot run micro finance
- More restriction on business
- Cannot invest in any company
- No advertisement allowed

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