What is a Nidhi company?

Nidhi Company is registered as per Section 406 of Companies Act, 2013. It belongs to NBFC (Non Banking Financial sector) category, as the main object behind its introduction is to promote the habits of savings and thrift among its members. One major difference between Nidhi Company and other NBFCs is that after Nidhi Company registration you can only accept deposits from and lend money to only its registered members.



Minimum Requirements for Nidhi Company Registration

If you are planning to go for Nidhi Company Registration there are certain minimum requirements that you must be aware of before starting Nidhi Company Registration process. These minimum requirements can be divided into two categories; Pre-incorporation requirements and Post-Incorporation requirements.

Pre-incorporation Requirements

As it is incorporated as a public company following minimum requirements are to be complied with;
  • There must be minimum 3 proposed directors.
  • There must be minimum 7 proposed members (shareholders).
  • Minimum paid-up capital requirement is 5 Lakh rupees.
  • Applicant must have a proposed registered office.
  • It cannot issue preference share neither at the time of incorporation not at any further point of time.

Post-Incorporation Requirements

Once a Nidhi Company Registration is completed the registered entity is required to meet certain set objectives within a year. These post-incorporation requirements are listed below:
  • Nidhi Company must increase its total number of members up to 200 within a year.
  •  At the end of one year, Nidhi company is required to maintain its Net Owned Funds of more than 10 Lakh Rupees.
  • The company must maintain a ratio of more than 1:20 between its net owned funds and deposit at all times after one year of successful Nidhi Company registration.
  • Rule 14 of Nidhi rules specify that the company must invest in Un-encumbered term deposits. And the amount of such deposits must not be less than 10% of its outstanding deposits.