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TAXAJ Corporate Services LLP - Financial Doctors

Nidhi Company Incorporation

Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. These companies typically operate in the southern part of the country. Nidhi Company isn’t required to receive the license from Reserve Bank of India (RBI), hence it is easy to form. It is registered as a public company and should have “Nidhi Limited” as the last words of its name.

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About This Plan

Get your Nidhi company registered in the fastest possible manner.

Created by potrace 1.15, written by Peter Selinger 2001-2017


It usually takes 10 to 15 working days.

Services Covered
Who Should Buy
How It's Done
Documents Required
Services Covered

  • Name approval in RUN
  • Digital Signature Tokens
  • Filing of Forms
  • Issue of Incorporation Certificate along with PAN and TAN
  • Includes Govt Fees & Stamp duty for Authorised Capital upto Rs. 1 Lakh except for the states of Punjab, Madhya Pradesh and Kerala
  • Body Corporate as director or business needing RBI/SEBI approval
  • Assistance in Opening Bank Account
Who Should Buy

  • Businesses looking to expand or scale operations on higher level
  • Businesses aiming to work globally or with reputed clients
  • Businesses looking to expand or scale their operations
How It's Done

  1. DSC Application

  2. Name approval form filing

  3. Preparation of Incorporation Documents

  4. Getting those docs signed by the respective stakeholders

  5. Filing of e-Forms with ROC

  6. Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.

Documents Required

  1. Name, Contact Number and Email Id of all the Stakeholders.

  2. Directors Identification Number, if already.

  3. Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.

  4. Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.

  5. Latest Month Personal Bank statement of all the Stakeholders.

  6. Specimen Signatures of all Stakeholders.

  7. Few Proposed Business Names along with Objects.

  8. Latest Electricity Bill/Landline Bill of Registered Office.

  9. NOC from owner of registered office. (If Owned)

  10. Rent Agreement from Landlord. (If Rented/Leased)

  11. Brief description of main business activities of the proposed Company.

  12. Shareholding pattern (50:50 or 60:40) between the Stakeholders.

  13.  Authorised & Paid Up Share Capital of the Company.

Fill up this Form to Launch your Dream Start-Up

Nidhi Company unleashed in this video!

Nidhi Company Registration in the Fastest Manner

The core business activity of a nidhi company is to borrow and lend money to its members only. A nidhi company can take deposits from its members and offer money to them. TAXAJ has a team of passionate and highly experienced professionals to offer nidhi company registration service. The procedure of nidhi limited company formation is quite easy and it does not require any RBI approval for that kind of company registration in India.

We help growing entrepreneurs to process their nidhi company registration documents accurately and perform the registration process in fastest and hassle-free ways. Our experts have in-depth experience to provide multiple services like income tax registration of different businesses like Private, Public, Trust, Society, GST Registration, etc. We're here to help you start, run and grow your nidhi company in short time in financial business sector.

We are aware of nidhi company registration online procedure to make the registration process in fastest way. At TAXAJ, we use state- of-the-art technology and our experts are well-experienced with Tally, MS Office, SAP and other hi-end applications. You can contact us to get reliable and highly-experienced nidhi company registration consultants.

TAXAJ can help you register a finance nidhi company in few working days. We always keep ourselves updated to all technical updates, development and changes while dealing with any field. Our professionals offer the best services in cost-effective nidhi company registration fees. If you want to start your nidhi company today at low cost, contact us as soon as possible.

Procedure to Incorporate a Nidhi Company

Although registration procedure of a nidhi company is easy yet, support from a professional is recommended for filing difficult forms within proper deadline. It may seem difficult to understand government portals and terms therein too. Let us know the steps of Nidhi company incorporations process.

KYC of all the Directors and Shareholders

At least 3 directors and 7 members are needed. Same individuals can be both members and directors. Without DIN numbers, maximum 3 members can be directors at the time of incorporation of the company.

Digital Signature

DSC (Digital Signature) is a fundamental need for initiating the Nidhi Company Registration Process. All the forms are submitted must be self-attested.

Required details :

1. Email ID and Mobile number

2. PAN and Aadhaar

3. Passport Size Photo

Approval of Name

The suggested names of Nidhi Company must be unique and should not match the names of already registered companies. The name can be reserved with Reserve Unique Name (RUN) form..


After digital signature and name approval, we will draft all the directors' and shareholders' declarations sheets for their acceptance, articles of association, memorandum of association and subscription sheet.

Final Incorporation (MoA and AoA)

Once approval of name procedure is completed, the application for Nidhi Company Registration should be submitted through SPICe Form. The application should accompany Memorandum of Association (MoA) and Articles of Association (AoA) of Nidhi Company. Once proper inspection of the application is completed, COI is issued.


PAN and TAN applications will be done with Nidhi Company Registration.

A Few Key Points To Remember Before Starting a Nidhi Company in India

Requirements for minimum number of members, net owned fund etc. (As par Rule 5 of Nidhi Rules, 2014) :-

Within a period of one year from the date of incorporation, every nidhi shall ensure that it possesses :

a) Not less than 200 members

b) Net owned funds of Rs 10 lakhs or more

c) Unencumbered deposits of not less than 10% of the outstanding deposits as specified in Rule 14; and

d) The ratio of net owned fund to deposits of not more than 1:20

General restrictions or prohibitions (As par Rule 6 of Nidhi Rules, 2014) :-

Nidhi shall not :

a) Continue the business of hire purchase finance, chit fund, insurance, leasing finance or acquisition of securities allotted by any corporate entity;

b) Issue preference shares, debentures or any other debt instrument in any form or by any name;

c) Open a current account with its members;

d) Obtain another company by purchase of securities or manage the composition of the Board of Directors of any other company in any way whatsoever or enter into any preparation for the alteration of its management, unless it has approved a special resolution in its general meeting and also attained the Previous approval of the Regional Director having authority over such Nidhi;

e) Carry on any business other than the business of lending or borrowing in its own name :
Given that Nidhis which have followed all the provisions of these rules may offer locker facilities on rent to its members subject to the rental income from such facilities not more than 20% of the gross income of the Nidhi at any point of time during a financial year.

f) Take deposits from or lend to any individual, other than its members;

g) Assurance of any of the assets lodged by its members as security;

h) Accept deposits from or lend money to anybody corporate;

(i) Enter into any partnership arrangement in its lending or borrowing tasks;

j) Provide or cause to provide any advertisement in any form for accepting deposit :
Only if private circulation of the details of fixed deposits system among the members of the Nidhi delivering the words "for private circulation to members only" shall not be taken to be an advertisement for accepting deposits.

(k) Pay incentive or brokerage for mobilising deposits from members or for deployment of funds or for granting loans.

Branches (As par Rule 10 of Nidhi Rules, 2014) :-

District level operations are conducted for the first 3 years. Once the approval is obtained from Regulator Director, it is possible to make 3 branch offices in the district or outside the area.

Others :-

a) Share value shall not less than Rs.10

b) Maximum interest on loan of 20% p.a. can be charged under reducing balance method.

c) A Nidhi company can offer loan against securities. Securities include property, gold, LIC and FD.

d) Rate of Interest : Maximum 7.5% above NBFC rate for loans (reducing Balance method), Savings Bank Interest shall not exceed 2% of the Bank Rate, FD & RD Interest – As per RBI rate

e) Period of Deposits

Fixed DepositsMinimum 6 months maximum 60 months
Recurring DepositsMinimum 12 months maximum 60 months

Activities Prohibited in a Nidhi Company

Nidhi Company can’t deal with chit funds, hire-purchase finance, leasing finance, insurance or securities business. It is strictly prohibited from accepting deposits from or lending funds to, any other person except members.

Also, it can’t advertise itself to ask for any deposits.

Number of members

Minimum of seven members is required to start a Nidhi Company out of which three members must be the directors of the company.

Share Capital and Owners’ Funds

A minimum of 5 lakh rupees, is required as the equity share capital to start a Nidhi Company. Nidhi Company can’t issue preference shares.

What are the conditions for getting "Nidhi" Status?

Within one year of its registration

  1. Nidhi Company should have minimum 200 members within one year from commencement
  2. Also, the net owned funds should be 10 lakh rupees or more. Net owned funds = Equity share capital + free reserves (-) accumulated losses (-) intangible assets
  3. Unencumbered term deposits must be 10% or higher of the outstanding deposits
  4. The ratio of net owned funds to deposits shouldn’t be more than 1:20

If Nidhi Company satisfies all above conditions, it should file NDH-1 along with prescribed fees within 90 days from the end of the first financial year after incorporation. The form must be duly certified by practicing CA/ CS/ CWA.

Extension of another financial year can be availed upon submission of NDH-2 to the Regional Director within 30 days from the end of the first financial year.

If even after the second financial year, it doesn’t fulfill the requirements, it can’t accept deposits till it complies with the provisions, and also penalty will be imposed.

Which activities are Prohibited for a Nidhi Company?

The Nidhi Companies have to abide by certain prohibitions which are imposed on them in terms of their activities. These activities can be listed as follows:

  • Nidhi Companies cannot deal with chit funds.
  • Nidhi Companies cannot deal with hire-purchase finance.
  • Nidhi Companies cannot deal with leasing of finances.
  • Nidhi Companies cannot deal with insurance business.
  • Nidhi Companies cannot deal with securities business.
  • Nidhi Companies cannot accept deposits from any other person except members.
  • Nidhi Companies cannot lend funds to any other person except members.

Benefits of Registering as Nidhi Company

There are various Benefits which can be availed by registering as a Nidhi Company. These advantages can be summed up as follows:

  • Legal existence: The registration of a company as a Nidhi Company makes it a separate entity. It enjoys separate legal existence as a registered Mutual Benefit Society. Being a separate entity from the members of the company, the company can acquire or dispose of assets in its own name.
  • Limited liability: Depending on the amount invested or contributed by the members of the company, their liabilities will be limited. The members will be liable only for their share in the company. Personal liabilities of the members cannot be used to meet the company’s liabilities.
  • Availability of funds: The members can borrow from the funds contributed by themselves at lower interest rates.

What are the minimum requirements for registration as a Nidhi Company?

There are certain requirements which are to be fulfilled by a company in order to to be registered as a Nidhi Company. The requirements may be summed up as follows:

  • The company must be incorporated as a Public Limited Company under the Companies Act.
  • The company should have a minimum of 7 shareholders.
  • The company should have a minimum of 3 directors.
  • The company should have a minimum of Rs.5 lakh of equity capital.
  • The company should have a minimum of 200 members.
  • The company should have Net Owned Funds worth Rs.10 lakh or more.
  • The name of the company should end with ‘Nidhi Limited’.
  • The objective of the company should be lending and borrowing of funds among the members only.
  • The company must have unencumbered term deposits of 10% or more of the outstanding deposits.
  • The company should have a Net Owned Funds to deposits ratio of 1:20 or less.
  • The Director Identification Number (DIN) of all the directors has to be provided.