Steps of Nidhi Company Registration Process


 

In India, Nidhi Companies have gained immense popularity due to their unique structure and member-centric operations. If you are looking for a safe and regulated option to encourage savings among members and offer loans at reasonable interest rates, then a Nidhi Company could be an ideal business model. However, before diving into operations, understanding the Nidhi Company registration process is crucial.

In this blog, we’ll walk you through the detailed steps of Nidhi Company registration, legal requirements, and the benefits of registering with the help of platforms like Online Legal India, making your company registration smooth and hassle-free.

What is a Nidhi Company?

A Nidhi Company is a type of Non-Banking Financial Company (NBFC), formed with the primary purpose of cultivating the habit of thrift, savings, and mutual benefit among its members. The company accepts deposits and lends money to its members only, complying with the rules outlined in Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014.

Unlike traditional NBFCs, a Nidhi Company does not require a Reserve Bank of India (RBI) license, making the company registration process relatively easier and more cost-effective.

Benefits of Registering a Nidhi Company

Before we dive into the steps, let’s look at the key benefits of Nidhi Company registration:

  • No RBI approval required – making it easier to operate.

  • Low risk of non-repayment since loans are given to members only.

  • Encourages savings among members and builds a financially strong community.

  • Minimal regulations compared to other NBFCs.

  • Separate legal entity status with limited liability protection.

Now, let’s understand the step-by-step company registration process for forming a Nidhi Company in India.

Step-by-Step Process of Nidhi Company Registration

The Nidhi Company registration process is straightforward if the documentation is complete and all compliances are followed properly. Here are the steps involved:

Step 1: Obtain Digital Signature Certificates (DSC)

The first step in any company registration process is obtaining Digital Signature Certificates (DSC) for all proposed directors. DSCs are mandatory for signing e-forms submitted to the Ministry of Corporate Affairs (MCA).

Documents required:

  • PAN card

  • Aadhaar card

  • Passport-size photo

  • Email ID and phone number

Once obtained, DSCs are valid for 2 years and can be used for other filings as well.

Step 2: Apply for Director Identification Number (DIN)

The next step involves applying for Director Identification Number (DIN) for all proposed directors. This is done using Form DIR-3 if the individual doesn’t already have one.

DIN is a unique number issued by the MCA and is mandatory for anyone who wishes to be appointed as a director in any company.

Step 3: Name Approval via RUN Form

Choosing an appropriate name is critical. The proposed name must end with “Nidhi Limited” and should not conflict with any existing company or trademark. Use the RUN (Reserve Unique Name) service on the MCA portal to apply for name approval.

Tips for selecting a name:

  • Must be unique and meaningful.

  • Avoid generic names like “Finance,” “Investment,” or “Bank.”

  • Should align with Nidhi Company rules.

You can apply for two names in a single submission, and the approved name remains valid for 20 days.

Step 4: Drafting MOA and AOA

Once the name is approved, the next step is drafting the Memorandum of Association (MOA) and Articles of Association (AOA) of the company.

  • MOA defines the company's objectives (e.g., accepting deposits, lending money to members).

  • AOA outlines the company’s internal rules and management practices.

Both documents must clearly specify that the company is a Nidhi Company, and operations will be conducted among its members only.

Step 5: Filing SPICe+ Form for Company Registration

Now, the most critical step – filing the SPICe+ form (Simplified Proforma for Incorporating Company Electronically Plus) on the MCA portal.

SPICe+ includes:

  • Company incorporation

  • PAN and TAN allocation

  • GST registration (optional)

  • EPFO and ESIC registration

  • Bank account opening (through AGILE-PRO)

Documents required:

  • Passport-size photos of directors

  • Proof of registered office (Rent Agreement/Ownership deed)

  • Utility bill (not older than 2 months)

  • Director’s ID and address proof

  • Declaration by directors (INC-9 and DIR-2)

The form is digitally signed using the DSC of the directors.

Step 6: Certificate of Incorporation (COI)

After filing, if the Registrar of Companies (ROC) is satisfied with the documents, they will issue the Certificate of Incorporation (COI) along with the Company Identification Number (CIN).

This certificate officially marks the completion of your company registration and allows you to start operations legally.

Step 7: Apply for PAN, TAN, and Bank Account

Post incorporation, the company must apply for:

  • PAN (Permanent Account Number)

  • TAN (Tax Deduction and Collection Account Number)

  • Bank account in the company’s name

These are essential for all tax-related filings and financial transactions. Thankfully, the SPICe+ form facilitates automatic PAN and TAN generation.

Step 8: Commencement of Business Certificate

Within 180 days of incorporation, the company must file a declaration in Form INC-20A stating that the shareholders have deposited the subscribed capital into the company’s bank account.

This step is mandatory, and failure to comply may lead to penalties or closure of the company.

Step 9: Post-Incorporation Compliance for Nidhi Company

After registration, a Nidhi Company must comply with the following requirements within 1 year:

  • Minimum 200 members

  • Minimum Net Owned Fund (NOF) of ₹10 lakhs

  • Unencumbered term deposits of 10% or more of outstanding deposits

  • Ratio of NOF to deposits not more than 1:20

Also, the company must file NDH-1 (within 90 days of the first financial year) and NDH-2 (if seeking extension), and NDH-3 (half-yearly return).


Why Choose Online Legal India for Nidhi Company Registration?

While the MCA has streamlined the registration process, preparing correct documentation, legal filings, and following compliance norms can still be overwhelming for entrepreneurs. That’s where Online Legal India can help.

Why choose us?

  • Expert legal professionals and CA support

  • Fast and affordable registration

  • 100% online process – no paperwork hassle

  • End-to-end assistance from name reservation to compliance filing

  • Transparent pricing and timely updates

With our support, your Nidhi Company registration journey becomes smooth, error-free, and fully compliant.

Conclusion

Starting a Nidhi Company is an excellent way to promote saving habits and offer mutual financial support in a community. But without a proper understanding of the company registration process, entrepreneurs may face delays or legal hurdles.

By following the above steps and ensuring you comply with all Nidhi Rules, you can successfully establish a Nidhi Company in India. Whether you're a startup founder or a social entrepreneur, platforms like Online Legal India are always here to guide you at every step.

Ready to register your Nidhi Company? Contact us today and get started on your journey to financial empowerment and social contribution.


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