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Nidhi Company

Nidhi Company

Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. 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. Nidhi Company is governed by Section 406 of the Companies Act, 2013 and Company Nidhi Rules, 2014 which has a sole objective of cultivating the habit of thrift and savings amongst its members. Nidhi companies are allowed to take deposit from its members and lend to its members only.

Pre-Registration Requirements for Nidhi Company

  • Minimum 7 Members;

  • Minimum 3 Directors;

  • No Minimum Capital Requirement;

  • No Preference Shares allowed to issue;

  • The object of the company shall be receiving deposits from and lending to its members only for their mutual benefits.

Post-Registration Requirements for Nidhi Company

  • Minimum 200 Members within 12 months of registration

  • Minimum Net Owned Fund (Paid Up Share Capital + Free Reserves) of 10 lakh or more.

  • A Nidhi Company shall not admit a body corporate, trust or minor as a member.

  • Net owned funds to Deposits should be 1:20

Annual Compliance for Nidhi Companies

  • NDH-1: Return of Statutory Compliances

  • NDH-2: Apply to the Regional Director for extension of time

  • NDH-3: Half yearly return with the Registrar

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