Companies Act, 2013 · Section 406 · Nidhi Rules, 2014
Nidhi company registration - done right
From ₹29,999 + GSTNidhi BasicSee fees
A Nidhi Company is a non-banking financial company (NBFC) that promotes thrift and savings among its members. Under Section 406 of the Companies Act, 2013, a new company is first incorporated as a public company (share capital ₹10 lakh) and must then be declared a Nidhi by the Central Government - by applying in Form NDH-4 within 120 days of incorporation with at least 200 members and ₹20 lakh net owned funds - before it accepts deposits. We handle the incorporation, the NDH-4 application and ongoing compliance under the Nidhi Rules, 2014.
- Min. Members
- 200+
- Companies Act
- Section 406
- RBI Classification
- NBFC
- Min. NOF
- ₹20L
- RBI NBFC compliance expertise
- Qualified CA and CS team
- Section 406 specialist team
Nidhi Company Registration
Share your details and our CA/CS team will call you back to assess your eligibility and explain the Nidhi registration process.
Key facts
The key facts, in one place
Everything a founder usually has to piece together from five different pages, in one place.
- Governing law
- Companies Act, 2013, Section 406
- Nidhi Rules, 2014
- Classification
- NBFC (Non-Banking Financial Company)
- Classified by RBI
- Min. members
- 200
- Needed for the NDH-4 application within 120 days of incorporation
- Min. net owned fund
- ₹20 lakh
- Needed for the NDH-4 application; share capital at incorporation ₹10 lakh
- NOF to deposits
- Not more than 1:20
- Deposits capped at 20 times net owned funds
- Declaration
- Form NDH-4 within 120 days
- No deposits until declared (deemed approved if no decision within 45 days)
- Incorporation time
- 15-25 working days
- With complete documents
What is a Nidhi Company?
A Nidhi Company is a class of non-banking financial company (NBFC) incorporated under Section 406 of the Companies Act, 2013. Its primary objective is to promote thrift and savings among its members, and to lend funds only to its members for their mutual benefit. Nidhi Companies operate as mutual benefit societies and are recognized by the Ministry of Corporate Affairs (MCA).
Unlike chit funds or other NBFCs, Nidhi Companies can only accept deposits from and lend to their own members. They cannot raise funds from the general public or issue debentures. The Nidhi Rules, 2014 (notified by MCA) regulate their formation, operation, and compliance. While Nidhi Companies are classified as NBFCs by RBI, they are exempt from certain RBI regulations applicable to other NBFCs.
Our CA/CS team handles the complete process - from checking eligibility, drafting MOA/AOA with Nidhi-specific clauses, to filing with ROC and post-registration compliance setup.
Nidhi Company vs other NBFC structures
Nidhi Company is one of several NBFC classifications. Here is how it compares.
Nidhi Company
MCA (Companies Act, 2013)
Other NBFC types
RBI (RBI Act, 1934)
| Aspect | Nidhi Company | Other NBFC types |
|---|---|---|
| Governing body | MCA (Companies Act, 2013) | RBI (RBI Act, 1934) |
| Classification | NBFC - Non-Systematically Important | Depends on asset size |
| Can accept public deposits | No - only member deposits | Some can (with RBI approval) |
| Can lend to public | No - only to members | Yes (with RBI approval) |
| Min. net owned fund | ₹20 lakh | ₹2 crore (for most NBFCs) |
| Min. members | 200 members for the NDH-4 declaration | Not applicable |
| RBI registration | Exempt (MCA-regulated) | Mandatory |
| Best for | Advantage: Community savings and lending among members | Drawback: Financial services at scale |
Bizeneed visual guide
Nidhi company registration - done right
Register your Nidhi Company under Section 406 of the Companies Act, 2013. Public company with ₹10 lakh share capital, then Central Government declaration in Form NDH-4 (200 members, ₹20 lakh NOF) before accepting deposits. Expert CA assistance from Bizeneed. From ₹29,999.
- 1Understand requirement
- 2Prepare documents
- 3Complete filing
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Eligibility
Who should register a Nidhi Company?
Nidhi Companies are ideal for community-based savings and lending groups that want a formal legal structure.
- Community groups wanting to formalise savings and lending among members
- Co-operative societies looking to convert to a company structure
- Founders with a ready pool of 200+ members
- Organisations wanting to accept deposits from members without RBI approval
- Chit fund organisers looking for a compliant alternative structure
- Community-based microfinance groups seeking a formal legal identity
Documents
Documents required for Nidhi Company registration
9 required
Email me the checklistCommon to every entity
- PAN Card of all directors/shareholdersRequired
- Aadhaar Card of all directors/shareholdersRequired
- Passport size photos of all directorsRequired
- Registered office address proof (electricity bill)Required
- NOC from property owner (if rented)Required
- Proposed Nidhi company name (2-3 alternatives)Required
- List of proposed 200+ members (with details)Required
- MOA with Nidhi-specific objects clauseRequired
- AOA with Nidhi-specific governance clausesRequired
Get the Nidhi Company checklist as a PDF
A one-page checklist for Nidhi Company registration under Section 406.
Process
How Nidhi Company registration works
Nidhi registration follows the standard SPICe+ process but with specific MOA/AOA clauses and membership documentation.
Eligibility check
We verify that you have (or can gather) 200+ members and a plan to maintain ₹20 lakh NOF. We also confirm the Nidhi-specific requirements for MOA/AOA.
Our CA team
Name reservation (SPICe+ Part A)
We reserve the name through SPICe+ Part A. The words 'Nidhi Limited' may be used only once the company is declared a Nidhi under section 406(1) (Nidhi Rules, rule 4(5) proviso, July 2024), so our CS confirms the exact naming route at filing.
Our team
MOA & AOA drafting
Our CA drafts the MOA with a specific objects clause mentioning thrift, savings, and lending among members. The AOA includes Nidhi-specific governance clauses.
Our CA team
SPICe+ filing
We file SPICe+ with all Nidhi-specific documents: MOA, AOA, member list (200+), director consent, registered office proof. The form is submitted to ROC for incorporation.
Our team
Incorporation certificate
ROC issues the Certificate of Incorporation as a public company limited by shares (share capital ₹10 lakh). Incorporation alone does not authorise Nidhi business or accepting deposits.
ROC
Declaration as Nidhi (Form NDH-4)
Within 120 days of incorporation, the company applies to the Central Government in Form NDH-4 with at least 200 members and net owned funds of ₹20 lakh; promoters and directors must meet the fit-and-proper criteria. Deposits must not be accepted until the company is declared (the application is deemed approved if no decision is conveyed within 45 days). Companies incorporated before the 2022 amendment follow transitional rules, which we review separately.
Our CS team + Central Government
Post-incorporation compliance setup
We set up the compliance calendar: first board meeting, auditor appointment, membership register, deposit acceptance norms, and annual Nidhi-specific filings.
Our team
The hardest part of Nidhi registration is NOT the incorporation - it is gathering 200+ members who are willing to be shareholders AND members. We recommend starting the membership drive at least 3 months before filing. The incorporation itself follows the standard SPICe+ process with Nidhi-specific clauses.
Timeline
Nidhi Company registration timeline
From eligibility check to incorporation certificate; the NDH-4 declaration follows within 120 days of incorporation.
| Stage | Duration |
|---|---|
| Eligibility verification (200+ members, ₹20L NOF) | 1-2 days |
| Name reservation (SPICe+ Part A) | 1-2 days |
| DIN & DSC application | 1-2 days |
| MOA & AOA drafting with Nidhi clauses | 3-5 days |
| Member list preparation (200+ members) | 5-10 days |
| SPICe+ filing | 2-3 days |
| ROC processing and certificate | 5-7 days |
Total: 15-25 working days from receiving complete documents and confirmed membership list. The membership list (200+ members) is the biggest variable - start gathering members early.
Pricing
Nidhi Company registration pricing
Government fees are the same as for regular companies. Our fee covers Nidhi-specific MOA/AOA drafting and compliance setup.
Nidhi Basic
Nidhi Company incorporation
₹29,999 + GST
- Name reservation (SPICe+ Part A)
- DIN + DSC
- Nidhi-specific MOA & AOA
- SPICe+ filing
- Incorporation Certificate
- Member list guidance
Most popular
Nidhi Standard
Complete Nidhi setup with compliance
₹49,999 + GST
- Everything in Basic
- Bank account opening assistance
- Share certificates
- Statutory registers
- First board meeting minutes
- Nidhi Rules compliance setup
- 3 months compliance support
Nidhi Premium
Full Nidhi package with ongoing compliance
₹89,999 + GST
- Everything in Standard
- Priority support (1 year)
- Annual ROC compliance (Nidhi-specific)
- Accounting setup
- Member management support
- Priority processing
Full fee breakdown
| Particulars | Government fee | Professional fee |
|---|---|---|
| SPICe+ form (incorporation + PAN + TAN) | Nil (up to ₹10L capital) | Included |
| DIN (per director) | ₹500 | Included |
| DSC (Class 3, 2 years) | ₹1,000-2,000 | Included |
| Professional fee - Nidhi Basic | Nil | ₹29,999 + GST |
| Professional fee - Nidhi Standard | Nil | ₹49,999 + GST |
| Professional fee - Nidhi Premium | Nil | ₹89,999 + GST |
Prices exclude GST. GST at the applicable rate is added to your invoice.
Not included in any tier:
- State-specific stamp duty
- Notary charges for any affidavits
- Ongoing membership management services
Which Nidhi registration plan suits you?
Answer three quick questions and we will recommend the right package.
Benefits
Why register as a Nidhi Company?
No RBI approval needed
- Exempt from RBI registration as NBFC (unlike other NBFCs that need ₹2 crore NOF and RBI approval)(Nidhi Rules, 2014, Rule 2)
- MCA-regulated, not RBI-regulated - simpler compliance framework
- Can accept deposits from members without RBI permission
Structured lending
- Can lend only to members - creates a trusted, closed-loop system
- Net owned funds to deposits ratio of not more than 1:20 - prevents over-leverage
Credibility
- Registered under Companies Act - MCA-verified legal entity
- Central Government declaration (NDH-4) before deposits are accepted
- Annual audited financials filed with ROC
Tax benefits
- Domestic company tax rate of 25%
- Deductions available under the Income Tax Act
- Eligible for MSME benefits and government schemes
The Nidhi Rules - what you need to know
- Nidhi Rules, 2014 are NOT the same as Companies Act compliance. A Nidhi Company must comply with BOTH the Companies Act, 2013 (for all companies) AND the Nidhi Rules, 2014 (specific to Nidhi Companies). The Nidhi Rules add extra requirements: 200+ members, specific disclosure norms in MOA/AOA, and restrictions on borrowing and lending.
- The 200-member rule is the biggest hurdle. A company incorporated as a Nidhi after the 2022 amendment must apply in Form NDH-4 within 120 days of incorporation with at least 200 members and ₹20 lakh net owned funds, and must not accept deposits until it is declared a Nidhi by the Central Government.
- Nidhi Companies cannot accept deposits from non-members. This is the fundamental restriction. A Nidhi Company can only accept deposits from its own members. Accepting deposits from the general public or non-members violates the Nidhi Rules and can attract penalties under the Companies Act, 2013 and the Nidhi Rules.
Common failure points
Common mistakes in Nidhi Company registration
Not having 200+ members ready
Start the membership drive 3-6 months before filing. Every member must provide PAN, Aadhaar, and a signed membership form.
Using a generic MOA without Nidhi-specific objects
The MOA must contain specific objects promoting thrift and savings among members. A standard company MOA will be rejected.
Using 'Nidhi Limited' in the name too early
Under the July 2024 proviso to rule 4(5) of the Nidhi Rules, a company must not use the words 'Nidhi Limited' in its name unless it has been declared a Nidhi under section 406(1). Our CS confirms the naming route at filing.
Confusing Nidhi with a chit fund
Nidhi Companies are NOT chit funds. They operate under the Companies Act, not the Chit Funds Act. Do not mix the two structures - they have completely different regulations and penalties.
Accepting deposits before the NDH-4 declaration
A newly incorporated Nidhi must not accept deposits until it has been declared a Nidhi by the Central Government on its Form NDH-4 application.
Every mistake above has a fix - and most can be avoided by getting the details right the first time. Getting it right first is easier than fixing it later.
If something has already gone wrong, or you want to make sure it does not, the 15-minute call below is the fastest path.
Why Bizeneed
How Bizeneed handles Nidhi Company registration
- Nidhi-specific MOA/AOA drafted by CAs experienced in NBFC law
- We guide you on membership gathering to meet the 200+ requirement
- Post-registration compliance setup including Nidhi-specific filings
- Expert review of every document before submission to ROC
- Ongoing annual compliance plans available for Nidhi Companies
FAQ
Frequently asked questions
A Nidhi Company is a class of Non-Banking Financial Company (NBFC) incorporated under Section 406 of the Companies Act, 2013. Its primary objective is to promote thrift and savings among its members and to lend funds only to its members. It operates under the Nidhi Rules, 2014 and is MCA-regulated.
A company incorporated as a Nidhi after the Nidhi (Amendment) Rules, 2022 must apply to the Central Government in Form NDH-4 within 120 days of incorporation with at least 200 members and ₹20 lakh net owned funds, and cannot accept deposits until it is declared a Nidhi. Older companies follow transitional rules that we review case by case.
A Nidhi Company must maintain a minimum Net Owned Fund (NOF) of ₹20 lakh. NOF is calculated as: paid-up share capital + free reserves - accumulated losses - deferred expenditure. This is much lower than the ₹2 crore NOF required for most other NBFCs.
No. Nidhi Companies are exempt from RBI registration as NBFCs under the Nidhi Rules, 2014. They are regulated by MCA (not RBI). However, they must comply with the Nidhi Rules, 2014 and are classified as NBFC - Non-Systematically Important by RBI.
No. A Nidhi Company can ONLY accept deposits from its own members. Accepting deposits from non-members violates the Nidhi Rules, 2014 and can attract penalties under the Companies Act, 2013 and the Nidhi Rules.
Only after the Central Government declares it a Nidhi on its Form NDH-4 application (filed within 120 days of incorporation with at least 200 members and ₹20 lakh net owned funds). The application is deemed approved if no decision is conveyed within 45 days. Deposit terms then follow the Nidhi Rules, 2014.
A Nidhi Company can ONLY lend to its own members. It cannot lend to non-members. Its net owned funds to deposits ratio must not exceed 1:20, and its lending and investments must follow the Nidhi Rules, 2014.
Nidhi Companies operate under the Companies Act, 2013 and Nidhi Rules, 2014. Chit funds operate under the Chit Funds Act, 1982. Nidhi Companies accept deposits and lend to members. Chit funds operate as rotating savings schemes. They are completely different structures with different regulations.
No. A Nidhi Company cannot issue any form of debentures or raise loans from non-members. It can only accept deposits from its members and must keep its net owned funds to deposits ratio within 1:20 under the Nidhi Rules.
Annual compliance includes: (1) AOC-4 (financial statements filed with ROC), (2) MGT-7 (annual return), (3) ADT-1 (auditor appointment), (4) DIR-3 KYC (director KYC), (5) Auditor's report with Nidhi-specific disclosures, (6) Nidhi compliance report, (7) Income tax return.
Yes. A Nidhi Company can convert to a regular NBFC by meeting the higher NOF requirements (₹2 crore) and obtaining RBI approval. The conversion process involves passing a special resolution, amending MOA/AOA, and applying to RBI for NBFC registration.
A new company that cannot show 200 members and ₹20 lakh net owned funds cannot apply in Form NDH-4 and so cannot be declared a Nidhi or accept deposits. The consequences for an existing Nidhi that falls below the requirements depend on the Nidhi Rules and the applicable transitional provisions; we review each case.
Branch opening by a Nidhi is restricted by the Nidhi Rules, 2014 (including conditions on profitability and limits on where branches can be opened). Our CS checks the current conditions for your company before you plan a branch.
A Nidhi Company is taxed as a domestic company: 25% where turnover in the specified earlier year did not exceed ₹400 crore, otherwise 30% (plus surcharge and cess), or the optional 22% regime under section 200 of the Income-tax Act, 2025. Dividend Distribution Tax was abolished from 1 April 2020; dividends are taxed in the members' hands, with TDS where applicable.
Yes. We offer annual compliance plans specifically designed for Nidhi Companies, covering all MCA filings (AOC-4, MGT-7, ADT-1), Nidhi-specific compliance reporting, and CA review. Our Premium plan includes priority support (1 year).
Written by Bizeneed Research Team, Service information
Last updated 5 September 2026
Sources
Nidhi Rules, FDI policy, and statutory requirements on this page are verified periodically against the sources above. These rules can change; confirm specifics with our team or your CA before relying on them for a business decision.
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