Member-only deposit & loan company
Category: Business Registration. From ₹14,999. Typical timeline: 20–25 days.
Overview
Nidhi Company registration creates a mutual benefit company under Section 406 of the Companies Act that can only accept deposits from and lend to its own members, operating on a not-for-profit-oriented, member-only model similar to a credit cooperative. It is used to formalise community savings and lending groups within a regulated company structure without RBI licensing.
Who needs it
- Community groups formalising local savings and credit circles into a regulated entity
- Promoters wanting to run a member-based deposit and loan business without RBI NBFC licensing
- Local associations seeking a structured, low-risk mutual benefit financial model
- Groups in semi-urban and rural areas needing accessible community lending
Eligibility
- Minimum seven members and three directors at incorporation, with directors also being members
- Must reach minimum 200 members within one year of incorporation
- Net owned funds of at least ₹10 lakh within one year of incorporation
- Net owned funds to deposits ratio not exceeding 1:20 after the first year
- Business restricted strictly to lending and deposit-taking among members only
Documents required
- PAN and Aadhaar of proposed directors and members
- Proof of registered office address
- Digital Signature Certificates of directors
- MoA and AoA restricted to Nidhi objects
- Declaration of compliance with minimum member and capital norms
Process
- Name reservation — Apply for name approval ending with "Nidhi Limited" via SPICe+ Part A.
- Incorporation filing — File SPICe+ Part B with MoA/AoA restricted to Nidhi-permitted activities.
- Certificate of Incorporation — RoC issues the Certificate of Incorporation as a public company classified as Nidhi.
- NDH-4 declaration — File Form NDH-4 within the prescribed period after meeting the 200-member and net owned funds criteria to obtain final Nidhi status.
Government fees
- SPICe+ incorporation filing: As per MCA fee schedule — depends on authorised capital
- Form NDH-4 filing: As per MCA fee schedule
- Stamp duty on MoA/AoA: Varies by state
Professional fee
Kanoons charges ₹14,999 for Nidhi Company incorporation including drafting, RoC filing and guidance on subsequent NDH-4 compliance.
Timeline
Incorporation typically takes 20–25 working days; reaching the 200-member and net owned funds thresholds for NDH-4 filing is a separate post-incorporation milestone.
Deliverables
- Certificate of Incorporation with CIN
- MoA and AoA restricted to Nidhi objects
- PAN and TAN of the company
- Compliance roadmap for NDH-1, NDH-2 and NDH-4 filings
Frequently asked questions
Can a Nidhi Company lend to non-members?
No, Nidhi Companies can only accept deposits from and lend to their own members as per the Nidhi Rules, 2014.
What happens if the 200-member requirement is not met in one year?
The company can apply for an extension via Form NDH-2 to the Regional Director, with valid reasons for the delay.
Is RBI registration required for a Nidhi Company?
No, Nidhi Companies are exempt from RBI's core NBFC registration requirements but must still comply with the Nidhi Rules under the Companies Act.
Common mistakes
- Not planning membership growth strategy to hit the 200-member target within one year
- Exceeding the 1:20 net owned funds to deposits ratio without corrective action
- Accepting deposits from non-members, which violates Nidhi Rules
- Delaying the NDH-4 filing after eligibility criteria are met
Penalties for non-compliance
- Failure to file NDH-4 within the prescribed timeline can restrict the company from filing further Nidhi-related forms and may attract RoC scrutiny
- Violation of lending/deposit restrictions can lead to penalties under the Nidhi Rules and Companies Act
- Non-compliance with net owned funds ratio can attract regulatory action and restrictions on further deposits
Legal references
- Companies Act, 2013, Section 406 — Nidhi Companies
- Nidhi Rules, 2014 — membership, deposit and lending restrictions
- Companies (Incorporation) Rules, 2014 — incorporation procedure
What will this cost you?
Adjust the options below for an instant, indicative estimate. Final pricing is confirmed once our team reviews your specific documents.
All catalogue prices are exclusive of GST. Tax (typically 18%) is calculated and added at checkout. Government fees vary by state and are confirmed before filing.
Packages for this service
Every tier includes the same filing accuracy and compliance review — the difference is turnaround priority, support access and how hands-on we are with your documents.
Indicative tiers — talk to us to confirm exact scope and pricing for your business.
Get this handled — start today
Delivered by our verified compliance experts and tax professionals — tracked end-to-end in your client portal.
Request a callback
Tell us what you need and our team will call you within one business day with a confirmed scope and quote.