Nidhi company

Nidhi Company also known as Mutual Benefit Finance Company is a perfect model for lending and borrowing of money for its members. The Registration process of incorporating Nidhi Company as an NBFC is administered by the provision of the Companies Act.

  • Digital Signature for Directors
  • DIN of Directors
  • Assistance in Company Name selection
  • Form filling with MOA & AOA
  • Get Corporate Identification Number
  • Obtain Company PAN & TAN
  • Bank Account Opening template
  • Guidance for Compliance requirement.

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Nidhi Company work as a Non-Banking Financial Company (NBFC) works on the value of mutual benefit of its members. The main objective of Nidhi Company is to borrow money and provide loans to the members. It works to build the habit of saving among its members. A major feature which helps in easy formation of Nidhi Company is that it does not required to receive the license from Reserve Bank of India (RBI),

The major difference between Nidhi Company and other type of companies is that Nidhi works for the mutual benefits of its member’s dealing with their deposits and give loans to them. In return Nidhi Company receive few exemptions with respect to annual compliances and taxation accordingly. Nidhi Company can be started with minimum seven members out of which three members should be the directors.

Basic purpose of incorporating a Nidhi Company is to encourage savings and better management of money among its members. For the fulfilment of this objective of nurturing the practise of careful saving and conservation for its members. Nidhi companies take a deposit from and lend money to the members. Simply, the capital to a Nidhi company is contributed by its members and shareholders and can be used only by the members of the Company.

Procedure to Form a Nidhi Company

Apply for DIN and DSC

Initial step is to apply for Director’s Identification number DIN and Digital Signature CertificateDSCis issued by the Ministry of Corporate Affairs..

Approval of Company Name

Apply for the Nidhi company name by suggesting 3 different and unique names to MCA which should not match the names of other already registered businesses.One name is accepted out of three and allocated to the company.

MOA and AOA Submission

After the nameapproval, prepare Memorandum of Association(MOA) and Article of Association(AOA) mentioning the main objective of incorporating a Nidhi company. Both documents along with subscription are filed to the MCA.

Certificate of Incorporation

Once above steps are completed successfully, next is to obtain certificate of incorporation of Nidhi Company having the company identification number (CIN). This process usually takes usually 15-25 days.

Get PAN/TAN Number and Bank Account

Final step is to apply for PAN and TAN number for the company by submitting required documents. Subsequently, open a bank account by submitting the MOA, AOA, and PAN and Certificate of Incorporation in the bank

Documents Required for Company Registration

  • All Directors PAN & Aadhaar Card.
  • Photographs of all the directors
  • Document of ID proof of all nominated directors and members.
  • Document of Address proof of all the directors and members
  • Recent Address Proof of the Company.
  • No Objection-Certificate (NOC) from the owner, in case if property is rented.

Benefits of Registering a Nidhi Company

Nidhi company incorporation is an established and popular way to start financial services but with limitation of capital. Below are some of the reasons for the attractiveness of Nidhi companies

Separate Legal Presence

Nidhi Company work as a single and separate legal body from its members and shareholders. Company can procure property on its name and also acquire debts.

Limited Liability of Members

As per The Companies Act 2013 directors and members is limited in Nidhi Company.

Continuous Existence

It has a long-lasting existence which is not affected by the exit or death of any or all members and shareholders.

Easy Management

As compared to other types of companies’ management and implementing any change in Nidhi Company is easy.

Credibility in Market

Nidhi Company is regulated by Ministry of Corporate affairs which gives Nidhi Companies more credibility.

Frequently Asked Questions (FAQ)


Nidhi Company is different from other NBFCs. Nidhi company required less amount of capital to start and also not regulated by RBI as compared to other NBFCs.


After the incorporation, Nidhi can only accept deposits from its registered members and shareholders.


Any person fulfilling following requirements can be a member of a Nidhi company: He must be an individual, corporate body and trust cannot become a member. He must be the age of 18 years or more.


RBI approval is not required for Nidhi Company to perform its operations. Nidhi Company can start working as soon as Registration process is completed.


Once the Nidhi Company registration process is over it is mandatory to meet the following requirements in a period of 1 year: Register minimum 200 members A minimum Rs. 10 Lakh net owned funds should be Maintain. . Uphold net owned funds to deposit with a ratio of 1:20 10% of total outstanding deposits must be unencumbered term deposits.

  • Secured loans can only be issued against following securities:
  • Jewellery and other precious metal like Gold, Silver
  • Immovable Property.
  • All Government securities, national saving certificates, insurance policies, Fixed Deposit etc.

Unsecured loans cannot be issued. Nidhi Company can only give secured loans to its members.

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