Nidhi Company Registration in India: Rules, Process & Cost
A Nidhi Company lets a community of members pool savings and lend to each other, without the licensing burden of an NBFC. This guide covers what a Nidhi Company is, the eligibility and capital rules under the Nidhi Rules, 2014, documents, the incorporation-to-NDH-4 process, real costs, and how KanoonPe handles the filing - with flat pricing and a filed-on-time-or-refund promise.
Quick summary
- What it is: A Public Limited Company formed to cultivate savings and lending habits among its members only, regulated by the Nidhi Rules, 2014.
- Governed by: Section 406 of the Companies Act, 2013, and the Nidhi Rules, 2014.
- Best for: Community-based savings and credit groups that want a formal, RBI-exempt lending structure.
- Minimum: 7 members and 3 directors at incorporation; 200 members within 1 year.
- KanoonPe price: Flat, all-inclusive quote on a free callback · Timeline: typically 15–20 working days for incorporation.
Quick facts
| Detail | Information |
|---|---|
| Governing law | Companies Act, 2013 (Section 406) and Nidhi Rules, 2014 |
| Registering authority | Registrar of Companies (ROC), under the MCA; RBI-exempt from NBFC licensing |
| Filing forms | SPICe+ (INC-32) for incorporation, Form NDH-1, NDH-2, NDH-4 for Nidhi status |
| Minimum members | 7 at incorporation; 200 within 1 year |
| Minimum directors | 3 |
| Net Owned Funds (NOF) | Minimum ₹20 lakh within 1 year of incorporation |
| NOF to deposit ratio | Not exceeding 1:20 |
| Timeline | 15–20 working days for incorporation (NDH-4 status filed after 1 year) |
| KanoonPe price | Flat, all-inclusive quote - request a free callback |
What is a Nidhi Company?
A Nidhi Company is a type of non-banking financial company incorporated as a Public Limited Company under the Companies Act, 2013, whose sole objective is to cultivate the habit of thrift and savings among its members and to lend money only to its own members. Nidhi Companies operate under the Nidhi Rules, 2014, and are specifically exempted from the Reserve Bank of India's core NBFC licensing requirements, making them lighter to set up than a licensed NBFC.
Because a Nidhi Company can only accept deposits from and lend to its own members - never the general public - it functions as a closed, member-owned mutual benefit society. This makes it a popular structure for community savings groups, chit-fund-adjacent thrift societies, and local lending cooperatives that want legal recognition without RBI's heavier NBFC compliance.
A Nidhi Company must add "Nidhi Limited" to its name and cannot engage in chit funds, hire purchase, leasing, insurance, or any business other than borrowing and lending among members.
Who should register a Nidhi Company?
A Nidhi Company is the right structure if you:
- Want to run a member-only savings and credit business within a defined community.
- Prefer to avoid full NBFC licensing from the RBI while still lending formally.
- Can mobilise at least 200 members within the first year, as required by the Nidhi Rules.
- Have promoters ready to commit the required Net Owned Funds (NOF).
If you need to raise deposits or lend to the general public (not just members), you would need an RBI-licensed NBFC instead - Nidhi Companies cannot serve non-members.
Benefits of Nidhi Company registration
- No RBI NBFC license required - Regulated under the simpler Nidhi Rules, 2014, instead of full NBFC norms.
- Low-cost, low-risk lending model - Loans are secured (gold, property, deposits) and confined to members only.
- Community trust and structure - A registered legal entity formalises informal thrift and chit arrangements.
- Limited liability for promoters - As a company, member/director liability is limited to their shareholding.
- Tax-efficient mutual structure - Nidhi income from member transactions can benefit from the principle of mutuality under tax law, subject to conditions.
- Scalable branch model - Once compliant, Nidhi Companies can open branches within the same district after meeting profitability norms.
Documents required for Nidhi Company registration
Identity & address proof (each of the 7 subscribers/3 directors)
- PAN card, Aadhaar/Voter ID/Passport
- Recent passport-size photograph
- Bank statement or utility bill (not older than 2 months)
Registered office proof
- Rent/lease agreement + NOC from owner, or ownership documents
- Latest utility bill for the office address
Company documents
- Draft MOA (objects restricted to Nidhi business) and AOA
- Declaration of compliance with Nidhi Rules, 2014
Ready to get started? Talk to a verified expert → - get a transparent, all-inclusive quote for your Nidhi Company within one business hour.
Nidhi Company registration process (step by step)
- Obtain DSC for all proposed directors. Class 3 Digital Signature Certificates are needed to sign MCA forms.
- Reserve the company name. Apply via SPICe+ Part A; the name must end with "Nidhi Limited."
- Draft MOA and AOA. Objects are restricted strictly to Nidhi business under Rule 6 of the Nidhi Rules, 2014.
- File SPICe+ Part B (INC-32). Incorporate as a Public Limited Company with a minimum of 7 members and 3 directors.
- Receive the Certificate of Incorporation, PAN and TAN.
- Meet the 1-year benchmarks. Within 1 year: 200+ members, Net Owned Funds of ₹20 lakh+, NOF-to-deposit ratio not exceeding 1:20, and unencumbered term deposits of at least 10% of outstanding deposits.
- File Form NDH-1 (Return of Statutory Compliance) within 90 days of the close of the first financial year.
- File Form NDH-4 to apply for a formal declaration of Nidhi status from the Central Government once the benchmarks are met.
How much does Nidhi Company registration cost in India?
| Cost component | What drives it |
|---|---|
| Government / ROC fees | Based on authorised capital |
| DSC charges | One per director |
| Stamp duty | Set by the state of registration |
| NDH-1/NDH-4 filing fees | Charged after the first year, once benchmarks are met |
| Professional fees | Drafting, SPICe+ filing, and compliance advisory |
KanoonPe offers a flat, all-inclusive quote for incorporation - professional fees, DSC, and standard SPICe+ filings bundled into one transparent number. NDH-1/NDH-4 filings after year one are quoted separately since they depend on your membership and deposit numbers.
Nidhi Company registration timeline
| Stage | Typical time |
|---|---|
| DSC & name approval | 3–5 working days |
| MOA/AOA drafting & SPICe+ filing | 3–5 working days |
| ROC processing & COI | 7–10 working days |
| Total (incorporation) | 15–20 working days |
| NDH-1 filing | Within 90 days of first financial year end |
| NDH-4 (Nidhi status declaration) | After 1 year, once benchmarks are met |
Every KanoonPe incorporation order ships with a written SLA - filed on time or you get a refund.
Post-registration compliance
- Maintain the 1:20 NOF-to-deposit ratio and monitor member/deposit growth continuously.
- File NDH-1 annually along with standard ROC annual returns (AOC-4, MGT-7) - see ROC Annual Compliance.
- File NDH-3 (half-yearly return) once operational, as prescribed.
- Restrict lending strictly to members and avoid the prohibited activities (chit funds, insurance, leasing, hire purchase).
- Complete DIR-3 KYC for all directors - see Director DIN KYC.
- File income tax returns annually and maintain proper books through Accounting & Bookkeeping.
Penalties for non-compliance
Failure to meet the NOF, membership, or NOF-to-deposit benchmarks within the prescribed time can attract penalties on the company and every officer in default under the Companies Act, 2013, and can jeopardise the grant (or continuation) of Nidhi status under Form NDH-4.
Nidhi Company vs NBFC vs Chit Fund
| Factor | Nidhi Company | NBFC | Chit Fund |
|---|---|---|---|
| RBI license | Not required | Mandatory | State-level registration |
| Who it can serve | Members only | Public | Subscribers only |
| Minimum capital/NOF | ₹20 lakh NOF (1 year) | ₹2 crore+ (NBFC-ICC) | Varies by state |
| Regulatory body | MCA / Central Government | RBI | State Registrar of Chits |
Choose Nidhi for a member-only, RBI-exempt savings structure; an NBFC to serve the public at scale; a chit fund for rotating savings schemes.
Why choose KanoonPe
- Transparent flat pricing - one all-inclusive number; government fees at actuals, shown upfront.
- Filed-on-time or refund - every order ships with a written SLA.
- One accountable case owner - a single named manager owns your Nidhi incorporation end to end.
- Live status tracking - track SPICe+, NDH-1, and NDH-4 filings in real time.
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