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Nidhi Company Registration

How to Register for Nidhi Company

A Nidhi Company is a special kind of company that isn’t a bank but helps people save and borrow money from each other. It’s like a club where members work together for their benefit by encouraging saving habits. These companies are mostly found in the southern part of India. The good thing is, that they don’t need a special license from the Reserve Bank of India (RBI), so they’re easy to create. They’re registered as public companies, and their names always end with ‘Nidhi Limited.

Nidhi Companies are restricted from engaging in activities like chit funds, hire-purchase finance, leasing finance, insurance, or securities business. Additionally, they cannot accept deposits or lend funds to non-members, and soliciting deposits through advertisements is strictly prohibited.

Essential Requirements for Nidhi Companies

To establish a Nidhi Company, a minimum of seven members is required, with three of them serving as directors. The company must have a starting equity share capital of at least 5 lakh rupees, and it is not permitted to issue preference shares.

Documentation for Registration for Nidhi Companies

The registration process involves providing proof of the business location, such as ownership documents or a rent/lease agreement. 

A No Objection Certificate from the owner or landlord is necessary. Members need to submit identity and address proofs, along with photos and PAN card copies. 

Digital signatures (DSC), Director Identification Numbers (DIN) for directors, and specific Memorandum of Association (MoA) and Articles of Association (AoA) are also required.

Forms to Submit for Nidhi 

During the registration process, two important forms, INC 9 and DIR 2, must be filed.

Conditions for Nidhi Status:

Within the first year of registration, a Nidhi Company must have a minimum of 200 members. The net owned funds, calculated as equity share capital plus free reserves minus accumulated losses and intangible assets, should be 10 lakh rupees or more. Unencumbered term deposits need to be at least 10% of the outstanding deposits, and the ratio of net owned funds to deposits should not exceed 1:20.


To maintain Nidhi status, the company must file form NDH-1 with the prescribed fees within 90 days from the end of the first financial year, and it must be certified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost and Works Accountant (CWA). An extension for another financial year can be requested by submitting NDH-2 to the Regional Director within 30 days from the end of the first financial year. Failure to meet requirements after the second financial year results in a prohibition on accepting deposits until compliance is achieved, with associated penalties.

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