What a Nidhi can and can't do
A Nidhi deals only with its members: it accepts their deposits and lends to them against specified security. It can't issue preference shares or debentures, accept deposits from or lend to non-members, carry on chit fund, hire-purchase, leasing or insurance business, or acquire other companies' securities.
Directors must meet "fit and proper" criteria, and a Nidhi can open branches only after earning net profits in each of the three preceding financial years.
Documents required
- PAN, Aadhaar and address proof of at least three directors and seven initial members.
- Registered office address proof and no-objection letter.
- Proposed name ending with "Nidhi Limited".
- Details of the ₹10 lakh capital and its source.
- Plan for reaching 200 members within 120 days.
The process
Incorporate as a public company
Through SPICe+, with objects limited to Nidhi business.
Build membership and funds
Reach 200 members and ₹20 lakh net owned funds within 120 days.
File NDH-4
Apply for declaration as a Nidhi within the same 120 days, with an auditor's certificate.
Declaration
Once declared, the company may accept deposits and lend to members within the rules.
Ongoing returns
Half-yearly and annual Nidhi returns, alongside the usual ROC filings.
Practical notes from our engagements
- Deposits taken before declaration. Not permitted. It's the fastest way to lose the application.
- Membership built with nominal members. Members are depositors and borrowers; the membership should be genuine and documented.
- NOF-to-deposit ratio ignored as deposits grow. Deposits can't exceed 20 times net owned funds; growth needs capital to match.
How we handle Nidhi registration
We incorporate the company, plan and document the membership and capital milestones against the 120-day window, file NDH-4 with the auditor's certificate, and then handle the Nidhi returns and ROC filings.
Related services
Frequently asked questions
What is the minimum capital for a Nidhi company?
₹10 lakh paid-up equity share capital, under the Nidhi Rules as amended in 2022.
How many members does a Nidhi need?
At least 200 members within 120 days of incorporation, along with net owned funds of at least ₹20 lakh.
What is NDH-4?
The application for declaration as a Nidhi, filed within 120 days of incorporation. The Central Government decides within 45 days, failing which the application is deemed approved.
Can a Nidhi accept deposits before declaration?
No. It can't accept deposits or give loans until it's declared a Nidhi.
How much can a Nidhi accept in deposits?
Up to 20 times its net owned funds.
Can a Nidhi lend to non-members?
No. A Nidhi deals only with its members.