Nidhi Company Registration Online in India

Nidhi Company registration allows you to form a public company that accepts deposits from and provides loans to its members for their mutual benefit. The company operates under Section 406 of the Companies Act, 2013, and the Nidhi Rules, 2014.

To register a Nidhi Company, you must meet specific requirements for its public company structure, members, directors, paid-up equity share capital, and Net Owned Funds (NOF). Under the current rules, a newly incorporated Nidhi Company must have ₹10 lakh paid-up equity share capital and meet the requirements of 200 members and ₹20 lakh NOF for Nidhi declaration.

After incorporation, the company must file Form INC-20A, where applicable, before commencing business or exercising borrowing powers. It must then meet the applicable Nidhi conditions and apply for Nidhi declaration through Form NDH-4 to the Central Government within 120 days of incorporation.

Important: Incorporating the company is not the same as completing the Nidhi declaration. A newly incorporated company must separately meet the applicable conditions and apply for Nidhi declaration through Form NDH-4 within the prescribed period.

Is a Nidhi Company an NBFC?

Yes, a Nidhi Company is classified as a Non-Banking Financial Company (NBFC) in the broader framework. However, it differs from traditional NBFCs in several ways.

Important Distinctions:

• No RBI Registration Required: Nidhi Companies are exempt from registering with the Reserve Bank of India (RBI).
• Limited Regulation by RBI: Since they only deal with their members, the RBI provides certain exemptions under the RBI Act, 1934. The RBI can issue directives, but does not oversee the company's daily operations.
• They cannot:
  • Issue preference shares, debentures, or any other debt instruments.
  • Conduct business such as chit funds, hire purchase, leasing, or insurance.

A Nidhi Company must meet specific requirements for its public company structure, members, directors, share capital, name, and registered office. Before starting the Nidhi Company registration process, check the following incorporation requirements:

• Public Company Structure: A Nidhi Company must be incorporated as a public company under the Companies Act, 2013.
• Minimum Members: At least 7 members are required to incorporate the company as a public company. No maximum limit on the number of members exists.
• Minimum Directors: The company must have at least 3 directors who meet the applicable eligibility requirements.
• Minimum Paid-Up Equity Share Capital: A Nidhi Company must have at least ₹10 lakh in paid-up equity share capital under the current framework. A Nidhi cannot issue preference shares.
• Company Name: The company's name must end with “Nidhi Limited” and comply with applicable company-name requirements.
• Objects of the Company: The constitutional documents must reflect the permitted Nidhi purpose of promoting thrift and savings among members and accepting deposits from and lending to members for their mutual benefit.
• Membership: The Nidhi structure is intended for individual members, subject to the membership conditions prescribed under the Nidhi Rules.
• Registered Office: The company must maintain a registered office in India and provide the applicable address and occupancy documents during incorporation.
• Equity Shares: A Nidhi Company issues equity shares to its members. The Nidhi Rules prescribe a minimum face value of ₹10 per equity share.

Requirements for Nidhi Declaration

Incorporation does not automatically make the company a declared Nidhi. After incorporation, the company must separately meet the conditions for Nidhi declaration and apply through Form NDH-4 within 120 days of incorporation.

• Minimum 200 Members: A newly incorporated company must have at least 200 members for Nidhi declaration.
• Minimum Net Owned Funds: The company must have Net Owned Funds (NOF) of at least ₹20 lakh when applying for Nidhi declaration.
• Fit-and-Proper Criteria: All promoters and directors must satisfy the prescribed fit-and-proper person criteria for the NDH-4 application.
• Form NDH-4: The company must file Form NDH-4 within 120 days of incorporation after meeting the applicable declaration requirements.

The exact documents depend on the subscribers, directors, registered office, and circumstances of incorporation. The usual incorporation documents include the following:

Documents of Subscribers and Directors

• PAN card of each individual subscriber and proposed director
• Identity proof such as Aadhaar, passport, voter ID, or driving license
• Address proof meeting the applicable MCA requirements
• Recent photograph, where required
• Digital Signature Certificate for the individuals who need to sign MCA filings
• Details required for DIN allotment where a proposed director does not already have a DIN

The MCA incorporation process allows DIN applications for eligible proposed directors through SPICe+ Part B. A separate DIN application is not required for directors whose DIN is allotted through the incorporation application.

Registered Office Documents

You generally need:

• Proof of registered office address
• Recent utility bill or other accepted address proof
• No Objection Certificate from the owner, where applicable
• Rent or lease agreement, where applicable

The exact attachment requirements depend on the nature of the premises and the documents available.

Incorporation and Constitutional Documents

The incorporation package can include:

• Memorandum of Association (MoA)
• Articles of Association (AoA)
• Subscriber and director details
• Required declarations and consents
• Registered office documents
• Other attachments requested by the MCA system based on the application

The MoA and AoA should contain provisions consistent with the Nidhi Rules and the company's proposed activities.

The Nidhi company registration online process involves several steps. Most of these steps are done through the MCA portal. Following these steps carefully helps ensure a smooth setup.

Step 1: Obtain a DSC and DIN

The first step involves getting the necessary digital IDs for the people who will run the company.

• Digital Signature Certificate (DSC): All proposed directors need to get a Class 3 DSC. This certificate is legally required for signing and filing documents electronically with the MCA. It ensures the documents are authentic and secure.
• Director Identification Number (DIN): Each director also needs a DIN. This unique ID number is given by the MCA to people who want to be company directors. You can apply for it along with the company incorporation application.

Step 2: Reserve the Company Name (SPICe+ Part A)

Reserving a suitable name is a critical first step.

• First, you apply to check if your chosen Nidhi company name is available. You do this using the SPICe+ Part A form on the MCA portal, which is specifically for name reservations.
• SPICe+ Part A allows up to two proposed names when you file it separately for name reservation. The proposed name must end with “Nidhi Limited” and comply with applicable MCA naming rules.

Step 3: Draft the MoA and AoA

These two documents are the foundation of your company. They explain its purpose and how it will be managed.

Memorandum of Association (MoA):

• The MoA document shows the main goals of the company and explains what the Nidhi Company can and cannot do.
• It also states the business purpose, which is to accept deposits from and lend money to its members.
• The MoA must state that deposits and loans are limited to members, as per the Nidhi Rules.

Articles of Association (AoA):

• The AoA lays out the internal rules for running the company, and it includes the roles and responsibilities of directors and members.
• It also explains how meetings, voting, and other operations will be handled.

Both documents must follow the Nidhi Rules, 2014, to make sure the company complies with the law.

Step 4: File the Main Incorporation Form (SPICe+ Part B)

After the company name is approved and the key documents are ready, the next step is to file SPICe+ Part B.

This is the main form used to register the company. It must be submitted along with the e-MoA (electronic Memorandum of Association) and e-AoA (electronic Articles of Association).

SPICe+ Part B is a combined application that includes:

• DIN (Director Identification Number)
• PAN (Permanent Account Number) for the company
• TAN (Tax Deduction and Collection Account Number)
• EPFO Registration
• ESIC Registration
• GST Registration (if required)

This combined process saves time and simplifies the overall setup. All the documents required (refer to the section below) for registration of a Nidhi Company are also attached to this form. This ensures that everything needed for approval is submitted in one place.

Step 5: Receive the Certificate of Incorporation (COI)

The final step is receiving official legal recognition for your company.

• After all submitted documents and forms are successfully checked, the Registrar of Companies (RoC) will issue the Certificate of Incorporation (COI).
• The COI proves your Nidhi company legally exists and includes your Corporate Identification Number (CIN), which is a unique ID for the company.

Step 6: File Form INC-20A

After incorporation, the company must file Form INC-20A to declare the commencement of business. A director must file this declaration with the Registrar of Companies within 180 days of incorporation. The company must also ensure that each subscriber has paid the agreed value of their shares.

Step 7: Apply for Nidhi Declaration Through Form NDH-4

After incorporation, the company must separately apply for the Nidhi declaration through Form NDH-4 within 120 days of incorporation. At the time of filing, the company must have at least 200 members and Net Owned Funds of ₹20 lakh or more. Promoters and directors must also satisfy the prescribed fit-and-proper person criteria.

The company should not accept deposits or provide loans under the Nidhi framework unless it meets the applicable declaration requirements. The Nidhi Rules restrict such activities when the company fails to comply with the declaration requirements.

Step 8: Receive the Nidhi Declaration

The Central Government examines the Form NDH-4 application and the company's compliance with the prescribed conditions. Once the application is approved, the company receives its declaration as a Nidhi and can operate under the applicable Nidhi framework.

Timeline for Nidhi Company Registration

The cost of Nidhi company registration can change based on several things, including government fees, stamp duty, and professional fees. It's wise to consider all these parts when planning your budget.

Government Fees (MCA Fees)

The MCA filing fee depends on the company's authorized share capital and the applicable incorporation rules.

For a company incorporated through SPICe+ with authorized capital of up to ₹15 lakh, the MCA provides a Zero Filing Fee concession. Therefore, no MCA filing fee is charged for a Nidhi Company with authorized capital up to ₹15 lakh, which covers the ₹10 lakh minimum a Nidhi requires.

However, state stamp duty and applicable charges for PAN and TAN remain payable during incorporation.

Stamp Duty for Nidhi Company Registration

Stamp duty applies to incorporation documents such as the Memorandum of Association (MoA) and Articles of Association (AoA). The applicable amount depends on the state and the company's authorized share capital. For example, with an authorized capital of ₹10 lakh, stamp duty may be as low as ₹173 in Jharkhand and as high as ₹15,025 in Punjab. The exact amount depends on the state and authorized capital.

For a detailed understanding of state-wise charges, refer to the Nidhi Company Registration Fees and the applicable stamp duty in each state.

Other and Professional Fees

These include charges for:

• Digital Signature Certificate (DSC): ₹2,500 per director
• Consultant or legal professional fees: ₹5,000 – ₹15,000
• Miscellaneous costs: ₹500 – ₹1,000

Fees can vary depending on:

• The experience of your Nidhi Company registration consultant.
• The complexity of your documents and service package.

After incorporation, a Nidhi Company must meet the requirements under the Companies Act, 2013 and Nidhi Rules, 2014. Newly incorporated Nidhis must complete the Nidhi declaration process and maintain the prescribed financial and membership conditions.

Nidhi Declaration Through Form NDH-4

A Nidhi Company incorporated under the current framework must apply for declaration as a Nidhi through Form NDH-4 within 120 days of incorporation. At the time of application, the company must have:

• At least 200 members
• Net Owned Funds of at least ₹20 lakh
• Promoters and directors who satisfy the prescribed fit and proper person criteria

The Central Government is required to decide the NDH-4 application within the prescribed period. For companies covered by the 2022 amendment, approval is deemed to be granted if no decision is conveyed within 45 days of receipt of the application.

Maintain Ongoing Nidhi Compliance

A Nidhi Company must maintain Net Owned Funds of at least ₹20 lakh, an NOF-to-deposit ratio of not more than 1:20, and unencumbered term deposits equal to at least 10% of outstanding deposits as prescribed under Rule 14. It must also file Form NDH-3 within 30 days after each half-year, with certification from a practicing company secretary, chartered accountant, or cost accountant. The company must also maintain statutory records, hold required meetings, prepare financial statements, complete its annual audit, and file applicable annual forms with the MCA. For the full post-incorporation compliance calendar (NDH-1/NDH-3, AOC-4, MGT-7, DIR-3 KYC), explore our Nidhi Company Compliance page.

The Ministry of Corporate Affairs (MCA) regulates Nidhi Companies in India under Section 406 of the Companies Act, 2013, and the Nidhi Rules, 2014. The key regulatory framework includes:

• Ministry of Corporate Affairs (MCA): Oversees Nidhi Companies under the Companies Act, 2013, and the Nidhi Rules, 2014.
• Registrar of Companies (RoC): Maintains company records and handles applicable incorporation and statutory filings.
• Central Government: Makes and amends the Nidhi Rules and handles the statutory framework for Nidhi declaration.
• Reserve Bank of India (RBI): Nidhi Companies do not require the standard NBFC registration under Section 45-IA of the RBI Act because the applicable exemption covers Nidhi Companies.

Therefore, Nidhi Companies primarily follow the MCA-administered Companies Act and Nidhi Rules, along with the specific statutory requirements applicable to their member-based deposit and lending activities.

Nidhi Company registration provides a member-based corporate structure for promoting savings and providing loans among members. The structure offers several benefits for groups that want to operate under the Nidhi framework prescribed by the Companies Act, 2013, and Nidhi Rules, 2014.

• Separate Legal Entity: A Nidhi Company has a separate legal identity from its members. It can own property, enter into contracts, maintain bank accounts, and conduct business in its own name.
• Limited Liability: Members' liability is generally limited to the amount unpaid on their shares, subject to applicable provisions of company law and other legal liabilities.
• Member-Based Savings Model: A Nidhi Company can accept deposits from its members under the conditions prescribed by the Nidhi Rules. This structure supports savings and thrift among its members.
• Loans to Members: A Nidhi Company can provide loans to its members against permitted securities, such as gold, silver, immovable property, or certain deposit-related securities, subject to prescribed limits and conditions.
• Mutual Benefit Structure: The Nidhi model focuses on the financial interests of its members rather than serving the general public. Its core activities involve accepting deposits from members and lending to members for mutual benefit.
• Perpetual Succession: The company's legal existence continues independently of changes in its individual members or directors, subject to the Companies Act and applicable compliance requirements.
• Corporate Structure: A Nidhi Company operates as a public company under the Companies Act, 2013. This provides a defined framework for shareholding, management, accounts, audits, meetings, and statutory filings.
• Permitted Locker Facilities: A Nidhi Company can provide locker facilities to its members, subject to the conditions and limits prescribed under the Nidhi Rules.

Nidhi companies follow specific rules and limits to ensure they stick to their goal of mutual benefit and don't get involved in unauthorized financial activities. These restrictions protect their members and keep the Nidhi model honest.

What Can a Nidhi Company Do?

Nidhi companies have clear boundaries that help them serve their members effectively.

• Accept Deposits: A Nidhi company can accept deposits from its members. These can be savings deposits, recurring deposits, or fixed deposits, offering members flexible ways to save.
• Provide Secured Loans: They can give secured loans to their members. These loans are backed by things like gold, silver, property, or fixed deposit receipts held with the company. The loan amounts and terms must follow the limits in the Nidhi Rules, ensuring smart lending.
• Offer Locker Facilities: A Nidhi Company can provide locker facilities to its members. Rule 6 limits the rental income from locker facilities to 20% of the Nidhi’s gross income. The rules do not prescribe a specific limit on the number of lockers the company may provide.

What a Nidhi Company Cannot Do?

To prevent misuse and keep their special status, Nidhi companies are not allowed to do certain things.

• Cannot carry on businesses like chit funds, hire purchase finance, leasing finance, insurance, or buying shares from any other company. This makes them different from other financial institutions.
• Cannot issue preference shares, debentures, or any other debt instruments. They raise funds mainly through member deposits and can issue only equity shares with a face value.
• Cannot open current accounts for its members. Only savings, recurring, and fixed deposits are allowed.
• Cannot buy another company by purchasing shares or control of who is on the Board of Directors of any other company. This stops them from moving into unrelated businesses.
• Cannot do any business other than borrowing and lending money in its name. This strict focus maintains their mutual benefit goal.
• Cannot use any assets given by its members as security for other purposes.
• Cannot enter into any partnership for its borrowing or lending activities. All operations must be done directly by the Nidhi company itself.
• A Nidhi Company cannot advertise to solicit deposits from members or the public. Under Rule 6(j), it may privately circulate details of its fixed deposit schemes among its members when the communication clearly states that it is “for private circulation to members only.”
• Cannot pay any commission or bonus for getting deposits from members, for using funds, or for giving loans. This prevents aggressive selling and ensures deposits come purely from members' savings.

Both structures serve member-based financial purposes, but they differ in their legal framework, regulatory authority, membership requirements, and permitted operations. The following table highlights the key differences between a Nidhi Company and a credit cooperative society:

The Nidhi (Amendment) Rules, 2022, introduced stricter requirements for newly incorporated Nidhi Companies, particularly for Nidhi declaration, share capital, membership, and promoter and director eligibility. The major changes include:

• Mandatory Nidhi Declaration: A public company incorporated as a Nidhi must apply to the Central Government for declaration as a Nidhi through Form NDH-4 within 120 days of incorporation. The company must have at least 200 members and ₹20 lakh in Net Owned Funds (NOF) when it applies.
• Higher Paid-Up Equity Share Capital: The 2022 amendment increased the minimum paid-up equity share capital for a Nidhi Company from ₹5 lakh to ₹10 lakh. The ₹10 lakh requirement applies under the current framework, while the earlier ₹5 lakh requirement belonged to the pre-2022 framework.
• Higher Net Owned Funds: The minimum NOF requirement increased from ₹10 lakh to ₹20 lakh for the Nidhi declaration framework applicable to newly incorporated companies.
• Minimum 200 Members: A newly incorporated Nidhi must have at least 200 members before applying for declaration through Form NDH-4.
• Fit-and-Proper Criteria: The promoters and directors must satisfy the prescribed fit-and-proper person criteria before the company receives Nidhi declaration.
• Deemed Approval: If the Central Government does not convey a decision on the NDH-4 application within 45 days of receiving the application, approval is deemed to have been granted for companies covered by the 2022 amendment.
• Restrictions on Branches: A Nidhi can open up to three branches within its district, subject to the applicable conditions. Opening more than three branches within the district or opening a branch outside the district requires prior Regional Director approval. A Nidhi cannot open branches, collection centers, or similar offices outside the state where its registered office is situated.
• Stricter Entry Before Member Deposits: The 2022 amendments strengthened the requirement for a Central Government declaration before a newly incorporated Nidhi can operate as a Nidhi and accept deposits within the Nidhi framework.

Once your Nidhi Company is registered with the Ministry of Corporate Affairs (MCA), you will get a Certificate of Incorporation (COI). This official paper proves your company is legally formed under the Companies Act, 2013, and follows the Nidhi Rules, 2014.

The COI shows important details like:

• Your company’s legal name
• Corporate Identification Number (CIN)
• Date of incorporation
• Registered office address

You need this:

• To open a company bank account
• To apply for PAN, TAN, and GST registrations
• To enter into legal agreements
• To get licenses and government approvals
• To build trust with members and authorities

This certificate is proof that your company exists legally and can operate as a Nidhi Company.

How to Download Your Nidhi Company Registration Certificate?

Follow these steps to download the Nidhi Company Registration Certificate:

1. Visit the MCA website at mca.gov.in.
2. Log in with your Business User ID and password.
3. Go to MCA Services and select “Get Certified Copies” or “View Public Documents.”
4. Search for your company using the CIN or name.
5. Pay the small fee, if required.
6. Download your Certificate of Incorporation in PDF format.
7. Save and print the certificate for your records.

This certificate is important for audits, legal filings, and official approvals. Keep it safe and easy to access for smooth business operations.