Limited Liability


Mutual Benefit








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Nidhi Company

Nidhi company is a mutual welfare society incorporated chiefly with the object of promoting the habit of retrench and savings among its members. Nidhi Company’s core concept revolves around borrowing and lending money between its members themselves, i.e., it receives deposits from and lends to strictly its members, for their mutual benefit. A Nidhi Company goes by a handful of other names as well: Permanent Fund, Benefit Fund, Mutual Benefit Fund and Mutual Benefit Company to cite a few. The company advances loans to its members at rates that are comparatively reasonable. Nidhi gives easy source of loan to members against collateral. The loans are generally secured.  When compared to the organized banking sector, the deposits mobilized by Nidhi is not much. Secured means of investment due to rigid membership structure. Once you have started your Nidhi Company, you can be assured of a successful venture resulting in effective growth.

It is the Ministry of Corporate Affairs that regulates the functioning of Nidhi Companies.  In matters pertaining to directions on deposit acceptance, a Nidhi Company is expected to comply with RBI directives. It is mandatory for Nidhi Companies to have a minimum of three directors and seven members at the time of company formation. On or before completion of first year of incorporation, the minimum number of members is expected to reach 200. On or before completion of first year of incorporation minimum net owned fund required of a Nidhi Company is Rs.10,00,000/-. A person who wants to be a director of NIDHI company must hold Rs. 20,000 shares of the company.


A Nidhi Company can be converted into a Non-Banking Financial Company (NBFC) Producer Companies. In fact, a Nidhi Company is the cheapest way to start an NBFC.  


To Register your Nidhi Company
  • 3 DIN + 8 DSC
  • MOA + AOA
  • PAN + TAN
  • GST Registration
  • 1 RUN Name Approval
  • Bank account opening documentation support
  • Commencement of Business Certificate
  • Certificate of Incorporation

Incorporation Process

The first step to registration is applying for the name of the Nidhi Company. The name must be unique. 

All proposed directors need to obtain Digital Signature Certificate (DSC) from a government recognized certifying agency. Identity proof, address proof, contact details and passport size photographs of the directors are required to obtain DSC. The Director Identification Number (DIN) will be automatically created after the procurement of DSC.

Once the name is approved and DSC is obtained, the incorporation process can be initiated by preparing and filing the MoA and AOA along with other necessary documents. 

After proper verification, the certificate of company incorporation will be issued by the Registrar of Companies.

Documents Required Nidhi Company

For Directors/Subscribers:

1. PAN Card

(Mandatory For Indian Resident)

2. ID Proof

(any one)

3. Address Proof

(any one)

For Company in Registration:

1. During Incorporation

1. If Premises is not owned by company:

  • Authorization from the owner or authorized occupant of the premises.
  • Lease/rent agreement in company’s name.
  • A Utility Bill (Telephone bill, Electricity bill or Gas bill not older than two months) in owner’s name.

2. If Premises is owned by company:

2. Post Incorporation

Following are the post incorporation compliances:



A Nidhi Company is required to have minimum 3 directors and 7 members at the time of formation.

No, a minor cannot be a member of a Nidhi. Same is the case for trusts and body corporates. Neither can be member of Nidhi Company. 

No, a Nidhi Company cannot issue Preference Shares. 

Yes, it can. However, a Nidhi Company is not allowed to open branches if it has not earned any profit after tax for three consecutive financial years.

The rate of interest on the loan advanced by a Nidhi company shall not exceed 7.5% above the highest rate of interest offered on deposits.

Yes, Nidhi Companies have Perpetual Existence. Death or departure of any member is not going to affect a Nidhi Company. It shall continue to exist till it gets dissolved legally.

No, Nidhi company cannot issue unsecured loans.


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