A Nidhi Company is a type of company in the Indian non-banking finance sector, recognized under Section 406 of the Companies Act, 2013. Their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds, and Mutual Benefit Company.
Nidhi Companies are specifically designed to promote the habit of thrift and savings among their members and provide financial security through mutual assistance. They operate on the principle of mutual benefit, where members can both deposit money and borrow from the company at reasonable rates.
These companies are regulated by the Ministry of Corporate Affairs and must comply with the Nidhi Rules, 2014. They are ideal for community-based financial organizations that want to help members save and provide credit facilities within the member community.
Understanding the fundamental characteristics that make Nidhi Company ideal for mutual benefit societies
Encourages members to develop saving habits and build financial security through regular deposits.
Only members can deposit and borrow money, ensuring mutual benefit and financial security within the community.
Requires at least 7 members to start, fostering community-based financial cooperation.
Company exists independently of its members, can own property, and operate as a legal entity.
Simpler compliance requirements compared to other NBFCs, making it easier to manage and operate.
Builds trust within the community through transparent operations and member-focused services.
Our streamlined process ensures quick and hassle-free Nidhi Company registration
Incorporate as a Public Limited Company first
Ensure minimum 7 members and 3 directors
Ensure minimum paid-up capital of ₹10 lakhs
Apply for Nidhi status with ROC after one year
Keep these documents ready for quick and smooth company registration process
All documents should be clear, legible, and not older than 2 months (except PAN and Aadhaar). Nidhi Company must be incorporated as a Public Limited Company first, and then apply for Nidhi status after one year of operations.
Discover why Nidhi Company is the preferred choice for mutual benefit societies
Encourages members to develop regular saving habits and build financial security over time.
Provides easy access to credit facilities for members at reasonable interest rates.
Simpler compliance requirements compared to other NBFCs, reducing operational burden.
Fosters community-based financial cooperation and mutual assistance among members.
Get answers to common questions about Nidhi Company registration
A Nidhi Company must have a minimum paid-up capital of ₹10 lakhs. The authorized capital should be at least ₹10 lakhs.
A minimum of 7 members is required to start a Nidhi Company. There is no maximum limit on the number of members.
No, Nidhi Companies can only accept deposits from their members. They cannot accept deposits from the general public.
Nidhi Companies can only lend money to their members. They cannot provide loans to non-members or engage in other business activities.
A company must be incorporated as a Public Limited Company first and operate for at least one year before applying for Nidhi status with the ROC.
Nidhi Companies must file annual returns, maintain proper books of accounts, hold annual general meetings, and comply with the Nidhi Rules, 2014.
Yes, Nidhi Companies are incorporated as Public Limited Companies, so they can issue shares, but they are restricted from accepting deposits from non-members.
Nidhi Company is a mutual benefit society that promotes savings and provides loans, while Chit Fund is a savings scheme where members contribute and bid for the pooled amount.