1)   As per sub-rule 1 of Rule 10 of Nidhi Company Rules 2014, a Nidhi company may open branch office only if it has earned net profits after tax continuously during the preceding three financial years.

For example:
A Nidhi Company can open branch only if it has earned profits continuously for next three years. Please mark the word “continuous”. Suppose, the earning of ABC Nidhi Limited in last five years is as follows:

Amount in Lacs

Year 1
Year 2
Year 3
Year 4
Year 5

In Year five, ABC Nidhi limited wants to open the branch, but they cannot
Because they have not earned profits for three consecutive years.

2)   However as per sub-rule 2 subject to the provisions contained in sub-rule 1 a Nidhi company can open up to 3 branches within the district

In other words, a Nidhi company can open branches only if following conditions are satisfied:

a)    It has earned profits in previous three years continuously.
b)    It can open branches within its district
c)    It can open maximum three branches
d)    It can’t open any branch outside the district without prior approval.
e)    It can’t open any branch outside the State.

3)   As per sub-rule 3, if a Nidhi recommends opening more than 3 branches within the district or any branch outside the district, it shall obtain the prior permission of the Regional Director and an intimation is to be given to the Registrar about the opening of every branch within thirty days of such opening.

4)   As per sub-rule 4, no after registration of Nidhi Company shall open a branch or collection center or office or deposit center or by whatever name called outside the state where its registered office is incorporated.
5)   Also as per sun rule 5 A Nidhi company shall open branches or collection center or any office or deposit center unless it has filed its financial statement and annual return up to date are filed with the Registrar.

6)   As per sub-rule 6, A Nidhi Company shall not close its branch unless it complies with the following necessary conditions:

   a)  A Nidhi company is required to publish an advertisement in the newspaper in the place where it carries on business at least 30 days prior to such closure

   b)  A Nidhi company is required to fix a copy of such advertisement or a notice informing such closure of the branch on the notice board of Nidhi for a period of at least 30 days from the date from which the advertisement is published.

   c) The Nidhi company has to intimate the ROC within 30 days of the closure of the branch

Nidhi Company registration rules have been introduced by companies act 2013, there is a limited area of operations for Nidhi Company though it has been preferred by the most of social entrepreneurs.