Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

About Nidhi Company

In this article, we will be discussing the procedure of the Incorporation of Nidhi Company. Nidhi Company is a non-banking financial business.

Nidhi Company performs lending and borrowing of money job with its members. This is done for the mutual benefits of all the members of the Nidhi company. It promotes saving and utilization of its funds within its members.

Nidhi Companies are governed with the provisions of Section 406 of the Companies Act, 2013 ("CA, 2013") and ruled by the Ministry of Corporative Affairs (hereinafter "MCA"). It is solely formed to create a habit of saving among the members of the Nidhi Company.

Procedure of registration of Nidhi company

The functioning of Nidhi Company:

• Funds are induced by the members in the form of contribution.

• Nidhi Company after aggregating all the contribution, lent it to the members in need at a reasonable rate of interest.


Ministry of Corporate affairs notified Nidhi Rules, 2014, in order to carry out the purposes of Nidhi Companies.

The Rules as aforesaid provides that it is applicable on:

-Every Company which is being declared as Nidhi company under the Companies Act

-Company working in accordance with the objectives of Nidhi company ie., working for the mutual benefit of society.

Pre-requisites for incorporating a Nidhi Company:

• There must be a minimum of 3 Directors;

• There must be a minimum of 7 Members;

• There is no Minimum Capital Requirement;

• Nidhi company are not allowed to issue Preference Shares;

• Objects must be limited to receiving of funds only from its members and lending to its members for mutual benefits.

What to do after Registration of Nidhi Company?

Raise minimum members to 200 within 12 months of registration of Nidhi company. If any time during the business of Nidhi company the aggregate of total members falls below 200 then it will be considered as a default. However in that case the Nidhi Company can request for more time to get the total number. The request shall be raised in form NDH 2 and shall be filed to Regional Director, MCA


Raise net owned fund to minimum 10 lakhs ie., (Paid Up Share Capital + Free Reserves).

Procedure of registration of Nidhi Company:

1. Obtain Digital Signature Certificate (DSC) of proposed Directors

This will be the first step of registration of Nidhi company, the proposed directors are required to obtain the DSC. It is optional to have DIN prior to registration of Nidhi Company

2. Application for Name Reservation using ‘RUN’ facility

After having DSC application for name availability in RUN facility of MCA portal is to be filed. It is to be noted that the word Nidhi Limited must be there at the end of the name of the proposed Company.

Every Company desiours to be registered as a "Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name. Now, one doesn’t require digital signature of applicant for name availability.

3. File Form SPICe 32


After the name approval, Form SPICe 32 shall be prepared and filed with the ministry with following attachments.

  • MOA & AOA.
  • PAN Card of all subscribers;
  • Identity Proof & Address Proof of First Directors;
  • Address Proof of Registered premises
  • Latest Utility Bill
  • NOC of Owner of Registered Office, if premises is rented
  • Consent and Declaration of first Directors
  • Self-Declaration from First Directors and Subscribers in Nidhi Company.

4. Certificate of registration of Nidhi Company

After being satisfying with the submission of documents and information the Registrar of Company will issue a Certificate of Incorporation.


CAclubindia's WhatsApp Groups Link


Published by

Praveen Singh
(Company Secretary)
Category Corporate Law   Report

  3 Shares   3384 Views


Related Articles


Popular Articles

Follow us Zoho Course 2023

CCI Articles

submit article