Nidhi Company Registration

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What is Nidhi Company Registration?

Nidhi is a company formed to cultivate habit of saving and thrift and mutual benefit of members by lending and borrowing between members of the company. A Nidhi company is a non-banking financial company(NBFC) which is regulated by Reserve bank of India from time to time. However, RBI has excluded the Nidhi companies from the core provisions of RBI act.

Minimum number of members required to make a Nidhi company in India is three.”Nidhi Limited” words are mentioned in the name of the company. Management of a Nidhi company doesn’t have external involvement so it becomes easier to manage a Nidhi Company. Also, investments in a Nidhi Company are secure. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Reserve Bank of India is empowered to issue directions to Nidhi Companies in matters relating to their deposit acceptance activities. Nidhi Company registration is simple as compared to other types of finance companies like NBFC which require RBI license to start.

Additional Read : Check Company Name Availability

Process of Nidhi Company Registration?


Get DSC(Digital Signature Certificate) and DIN(Director Identification Number (DIR 3 form) for the directors of the company which is issued by the MCA(Ministry of Corporate Affairs) by providing information through simple form on LegalDocs.


Approval of Name of the company(Form no. INC 1): Prior to approval of the name, a company name must be reserved with the MCA so that no one else can use it and it doesn’t match with existing companies.LegalDocs will handle this process and get your company name approved from the MCA.


Registration i.e. incorporation of company through form number INC 7,8,10,9,22, DIR 12,2 with documents with the registrar of companies is done after above mentioned processes which will be handled by our team.

Additional Read : How to Start a Nidhi Company in India?

Documents Required for Nidhi Company Registration

Copy of Director’s PAN Card Passport size photograph of Directors Copy of Aadhaar Card/ Voter identity card of directors
Copy of Rent agreement(If rented property) Electricity/ Water bill (Business Place) Copy of Property papers (If owned property)
Landlord NOC

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Advantages of Nidhi Company Registration

  • Separate Legal Entity:
    A Nidhi Company is considered as a separate legal entity and can own a property and incur debts
  • Easy Management:
    Registrar of companies governs the change of board members and thus can be done easily.
  • Ongoing concern:
    As long as the company is in existence, no member can claim a right on the property owned by the company.
  • Uninterrupted Existence:
    Changes in membership or death of members does not affect the existence of the company.
  • Better Credibility:
    Central government registers and monitors the Nidhi companies.
  • Lower rate of Interest:
    Rate of interest of borrowing for members is less as compared to the market rate.
  • Limited Liability:
    Any member is liable to only the amount he has invested in the company.Easy Ownership Transfer Tax Benefit.

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Nidhi Company FAQs

What is nidhi meaning?

Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.

Who can invest in a Nidhi Company?

Any Indian citizen above 18 years of age can become a member of the company and then only invest in the company.

How many people are required to form a Nidhi Company?

Three Directors and Seven members are necessary to form a Nidhi company.

What is the condition for a Nidhi Company to open a branch?

A Nidhi company must have made profits for three preceding years then it can open up to 3 branches in a district.

Are my deposits safe with a Nidhi Company?

Yes. Nidhi companies are registered with MCA and RBI has framed laws to secure deposits of the customers.

What is Nidhi company registration fees?

This fees depend on a lot of factors and varies from case to case basis. LegalDocs provides the best pricing in the market. Contact our expert to know the details.

Who is the regulator of Nidhi Companies?

Ministry of Corporate Affairs is the regulator of Nidhi Companies.

How does a Nidhi Company utilize funds procured by it?

Nidhi Company lends the money procured by it in form of loans to its members.

Is it compulsory to name a nidhi company as “Nidhi ltd” at its end?

Yes. It is compulsory to have nidhi ltd mentioned at the end of its name.

What is nidhi company registration process?

Please refer to the section “How to start a nidhi company” mentioned above to understand step by step nidhi company registration process.

What is the procedure for incorporation of nidhi company under companies act 2013?

Please refer to the section “PROCESS OF NIDHI COMPANY REGISTRATION” mentioned above to understand step by step incorporation of Nidhi Company.

What are nidhi company rbi guidelines?

RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, since Nidhis deal with their shareholder-members only, RBI has exempted such notified firms from the core provisions of the RBI Act and other directions applicable to NBFCs. As on date (February 2013) RBI does not have any specified regulatory framework for Nidhis.

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