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Nidhi Company Registration in India

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Documents: SPICe+ Form, MoA, AoA, DSC, DIN for 3 directors

Fees: MCA government fees starting from Rs 4,000 + stamp duty

Eligibility: Minimum 7 members, 3 directors, Rs 10 lakh paid-up capital

Timeline: 15-30 working days from DSC to Certificate of Incorporation

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Nidhi Company Registration - Overview

📌 TL;DR - Nidhi Company Registration Services at a Glance

Nidhi company registration is the process of incorporating a mutual benefit company under Section 406 of the Companies Act, 2013. These NBFC-category entities accept deposits from and lend to members only, without requiring RBI approval. Minimum requirement: 7 members, 3 directors, Rs 10 lakh paid-up equity capital. File SPICe+ on MCA portal and apply for Nidhi declaration via Form NDH-4 within 120 days of incorporation.

Nidhi company registration opens the door for entrepreneurs to start a lending and deposit business in India without the complexity of RBI licensing. Governed by the Ministry of Corporate Affairs (MCA) under Section 406 of the Companies Act, 2013 and the Nidhi Rules, 2014, these entities serve as mutual benefit societies that cultivate savings habits among members.

ParameterDetails
Governing LawSection 406, Companies Act 2013 + Nidhi Rules, 2014 (as amended 2019, 2022)
Company TypePublic Limited Company with name ending in 'Nidhi Limited'
Minimum Members7 subscribers (must reach 200 within first year)
Minimum Directors3 (at least 1 resident in India)
Minimum Paid-Up CapitalRs 10 lakh (equity shares only - no preference shares)
Net Owned FundsRs 20 lakh within 120 days of incorporation
Timeline15-30 working days for incorporation; NDH-4 within 120 days post-incorporation

As of 2024, over 4,200 Nidhi companies operate across India, predominantly in southern states. The Nidhi (Amendment) Rules, 2022 introduced stricter requirements including increased paid-up capital of Rs 10 lakh and mandatory Central Government declaration via Form NDH-4.

Content is reviewed quarterly for accuracy.

What Is Nidhi Company Registration?

A Nidhi company is a non-banking financial company (NBFC) incorporated under Section 406 of the Companies Act, 2013 with the sole object of cultivating thrift and savings among its members, receiving deposits from, and lending to, its members only for their mutual benefit.

Unlike traditional NBFCs that require RBI registration and Rs 2 crore minimum capital, a Nidhi company is exempt from core RBI provisions under Section 45-IA of the RBI Act, 1934. This exemption makes Nidhi company registration the most accessible route to start a lending business in India. The company must be formed as a public limited company with its name ending in 'Nidhi Limited' as mandated by the Nidhi Rules, 2014.

The Nidhi (Amendment) Rules, 2022 (effective 19 April 2022) further strengthened the framework by increasing minimum paid-up capital from Rs 5 lakh to Rs 10 lakh and requiring Central Government declaration under Section 406(1).

Key Terms for Nidhi Company Registration:

Nidhi / Mutual Benefit Society: A company declared by the Central Government under Section 406(1) of the Companies Act, 2013 to accept deposits from and lend to its members exclusively for mutual benefit.

Net Owned Funds (NOF): Calculated as equity share capital plus free reserves, minus accumulated losses and intangible assets. Must be at least Rs 20 lakh within 120 days of incorporation under Rule 5 of Nidhi Rules, 2014.

Form NDH-4: The application form filed with the Central Government for declaration as a Nidhi company, required within 120 days of incorporation under the Nidhi (Amendment) Rules, 2019.

SPICe+ (INC-32): Simplified Proforma for Incorporating Company Electronically Plus, the integrated MCA form used for company incorporation, DIN allotment, PAN/TAN application, and GSTIN application.

NOF-to-Deposit Ratio: The ratio of net owned funds to outstanding deposits must not exceed 1:20 under Rule 5(1)(d) of the Nidhi Rules, 2014. An investment of Re 1 allows the company to accept up to Rs 20 in deposits.

APL-05 Nidhi Company Registration
MCA Registered Nidhi Limited

Who Should Register a Nidhi Company?

Nidhi company registration is ideal for individuals and groups seeking to start a deposit-taking and lending business within a closed membership framework. This includes:

  • Entrepreneurs planning to start a small finance or loan business in India without obtaining RBI registration
  • Groups or communities wanting to create a savings and credit institution for mutual benefit
  • Financial service professionals seeking to establish a regulated lending entity with lower compliance than a traditional NBFC
  • Cooperative-minded individuals in semi-urban and rural areas who want to promote financial discipline

Eligibility Requirements under Nidhi Rules, 2014 (as amended):

  • Minimum 7 members (subscribers) at the time of incorporation under Section 3(1) of the Companies Act, 2013
  • Minimum 3 directors, of whom at least 1 must be resident in India
  • Minimum paid-up equity share capital of Rs 10 lakh under Rule 5 of the Nidhi (Amendment) Rules, 2022
  • Company name must end with 'Nidhi Limited' per Rule 4(5) of the Nidhi Rules, 2014
  • No preference shares can be issued
  • Net Owned Funds of Rs 20 lakh within 120 days of incorporation
  • Minimum 200 members within the first year of incorporation

Patron Accounting's Nidhi Company Registration Services

ServiceWhat We Do
Complete Incorporation PackageEnd-to-end Nidhi company registration including DSC procurement, DIN application, SPICe+ filing, MoA/AoA drafting, and Certificate of Incorporation from ROC
Name Approval and ReservationScreening 2-3 unique names ending in 'Nidhi Limited' through SPICe+ Part A, ensuring MCA compliance and no trademark conflicts
NDH-4 Declaration FilingPreparation and timely filing of Form NDH-4 with the Central Government within 120 days of incorporation for official Nidhi declaration
Post-Incorporation Compliance SetupBank account opening, statutory register maintenance, first board meeting facilitation, and compliance calendar for NDH-1, NDH-3, and annual returns
MoA and AoA DraftingCustomised Memorandum and Articles of Association reflecting the sole Nidhi object of member savings and lending, per Section 406 requirements
Ongoing Compliance SupportHalf-yearly return filing (NDH-3), statutory audit coordination, annual return with ROC, and net worth certification by practicing CA
Our Process

7-Step Nidhi Company Registration Process

Our streamlined process takes you from DSC procurement to Certificate of Incorporation in 15-30 working days, followed by NDH-4 declaration filing within 120 days.

Step 1

Obtain Digital Signature Certificates (DSC)

All proposed directors must obtain Class 3 DSC from MCA-certified agencies. DSC is mandatory for electronically signing all incorporation forms on the MCA portal. Issuance typically takes 24-48 hours.

Class 3 DSC for all directors 24-48 hours issuance
DSC Ready 01
Step 2

Apply for Director Identification Number (DIN)

DIN is allotted through the SPICe+ form itself. Each director requires a unique DIN issued by MCA under Section 153 of the Companies Act, 2013. Directors with existing DIN can skip this step.

Integrated via SPICe+ Unique DIN per director
DIN Allotted 02
Step 3

Reserve Company Name via SPICe+ Part A

Propose at least 2 unique names ending in 'Nidhi Limited' through SPICe+ Part A (RUN service) on the MCA portal. The approved name is valid for 20 days under Rule 8 of the Companies (Incorporation) Rules, 2014.

2-3 name options proposed Valid for 20 days
Name Reserved 03
Step 4

Draft MoA and AoA

The Memorandum of Association must state the sole object: cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit per Section 406(1). Articles of Association define internal governance rules.

Nidhi-specific object clause e-MoA (INC-33) + e-AoA (INC-34)
MoA/AoA Drafted 04
Step 5

File SPICe+ Part B (INC-32) with ROC

Submit the integrated SPICe+ form with company details, director information, registered office address, subscriber details, and linked applications for PAN, TAN, GSTIN, EPFO, and ESIC. The form must be digitally signed by one director and a practicing professional (CA/CS/CWA).

Integrated PAN/TAN/GSTIN CA/CS certified filing
SPICe+ Filed 05
Step 6

Receive Certificate of Incorporation

Upon verification, the Registrar of Companies issues the Certificate of Incorporation with the Corporate Identity Number (CIN), PAN, and TAN. This typically takes 7-15 working days from submission under Section 7(2) of the Companies Act, 2013.

CIN + PAN + TAN issued 7-15 working days
COI Issued 06
Step 7

File Form NDH-4 for Nidhi Declaration

Within 120 days of incorporation, apply to the Central Government in Form NDH-4 for declaration as a Nidhi company under Section 406(1). The company must meet: Net Owned Funds of Rs 20 lakh and minimum 200 members. If no decision within 45 days, approval is deemed granted.

120-day deadline 45-day deemed approval
NDH-4
Nidhi Declared 07

Documents Required for Nidhi Company Registration

  • PAN cards of all 7 subscribers and 3 directors
  • Aadhaar cards / Voter ID of all members and directors
  • Passport-size photographs of all directors
  • Address proof of directors (utility bill / bank statement not older than 2 months)
  • Digital Signature Certificates (DSC) for all directors
  • Proof of registered office address (rent agreement / sale deed + NOC from owner + utility bill)
  • Memorandum of Association (MoA) with Nidhi-specific object clause
  • Articles of Association (AoA) as per Nidhi Rules, 2014
  • Declaration by subscribers and first directors (Form INC-9)
  • Declaration by directors as per Rule 5 and 6 of Nidhi Rules, 2014 (Form DIR-2)
  • Board Resolution for registered office and authorised signatory
  • No Objection Certificate from property owner for registered office

Download our free Nidhi company registration document checklist to ensure complete filing.

4 Common Challenges and How We Solve Them

ChallengeImpactHow Patron Accounting Solves It
Achieving 200 Members Within First YearNon-compliance bars the company from accepting deposits and may attract penalties under Rule 24Member enrollment strategy, compliance tracking, and timely NDH-1 filing within 90 days of first financial year-end
Meeting Rs 20 Lakh NOF Within 120 DaysFailure to meet the 120-day window delays NDH-4 filing and blocks deposit acceptanceStructured capital infusion planning and proactive NDH-4 filing before deadline
MoA Object Clause Rejection by ROCIncorrect object clause leads to rejection and delays, requiring resubmission with feesCS team drafts MoA with precise Section 406 statutory language for first-time approval
Post-Registration Compliance OverloadMultiple filings - NDH-1, NDH-3, annual returns, audit - risk penalties of Rs 5,000 + Rs 500/dayDedicated compliance calendar, filing support, and penalty prevention for all statutory deadlines

Nidhi Company Registration Fees and Government Charges

Fee ComponentAmount
MCA SPICe+ Filing Fee (up to Rs 10 lakh capital)Rs 4,000 - Rs 34,000 (based on authorised capital)
Stamp Duty on MoA/AoARs 500 - Rs 5,000 (varies by state)
DSC for Directors (per director)Rs 500 - Rs 2,000
DIN ApplicationIncluded in SPICe+ (no separate fee)
Name Reservation (RUN)Rs 1,000
PAN and TAN ApplicationRs 110 approximately
Minimum Paid-Up Capital RequiredRs 10 lakh (Nidhi Amendment Rules, 2022)
Patron Accounting Professional FeesStarting from INR 9,999 (Exl GST and Govt. Charges)

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free Nidhi Company Registration consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Time Taken for Nidhi Company Registration

StageEstimated Timeline
DSC Procurement1-2 days
Name Reservation (SPICe+ Part A)2-3 days
MoA/AoA Drafting2-3 days
SPICe+ Part B Filing and Processing7-15 working days
Certificate of IncorporationIssued upon SPICe+ approval
Bank Account Opening3-5 days post-incorporation
NDH-4 Filing for Nidhi DeclarationWithin 120 days of incorporation
Total (Incorporation Only)15-30 working days

Important: The 120-day window for NDH-4 filing starts from the date of incorporation. Missing this deadline bars the company from accepting deposits or lending to members. The 45-day deemed approval provision under the 2022 amendments applies only to complete and compliant applications.

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Key Benefits

Why Choose Professional Nidhi Company Registration?

No RBI Approval Required

Unlike traditional NBFCs requiring Rs 2 crore capital and RBI registration, Nidhi companies are exempt from core RBI provisions, saving months of regulatory processing.

Expert MoA Drafting

The single-object MoA requirement under Section 406 is strict - our CS team ensures exact statutory language to prevent ROC rejection.

Timely NDH-4 Compliance

Missing the 120-day NDH-4 deadline bars the company from accepting deposits or lending. Our proactive calendar ensures filing well before the deadline.

End-to-End Incorporation

From DSC to Certificate of Incorporation to bank account opening - a single point of contact eliminates coordination delays across multiple agencies.

Ongoing Compliance Support

Post-registration filings (NDH-1, NDH-3, annual returns, statutory audit) are complex. Our team handles all compliance to avoid penalties of up to Rs 5,000 plus Rs 500/day.

Member Enrollment Strategy

Achieving 200 members in year one is challenging. We provide practical guidance on member acquisition, documentation, and compliance reporting.

Why 10,000+ Businesses Trust Patron Accounting

10,000+ Businesses Served | 4.9 Google Rating | 50,000+ Documents Filed | 15+ Years Experience

"Professionalism, attention to detail, and timely communication made the process smooth." - Subhendu Mishra

"Took minimum time, really impressive acumen. And it's not expensive at all." - Rajib Dutta

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With offices in Pune, Mumbai, Delhi, and Gurugram, Patron Accounting serves businesses across India - both in-person and remotely.

Nidhi Company vs NBFC vs Section 8 Company

ParameterNidhi CompanyNBFCSection 8 Company
Governing LawSection 406, Companies Act + Nidhi Rules 2014RBI Act 1934 + Companies ActSection 8, Companies Act 2013
RBI ApprovalNot requiredMandatoryNot required
Minimum CapitalRs 10 lakhRs 2 croreNo minimum prescribed
Can Accept DepositsYes (from members only)Yes (with RBI approval)No
Can Lend MoneyYes (to members only)Yes (to public)No (non-profit)
Membership LimitOnly members; 200 within 1 yearPublic at largeMembers; no minimum count
Profit DistributionAllowed (dividend)AllowedNot allowed (non-profit)

Related Services from Patron Accounting

Legal and Compliance Framework for Nidhi Companies

Governing Act: Companies Act, 2013 - Section 406 (as amended by Companies (Amendment) Act, 2017, effective 15 August 2019).

Governing Rules: Nidhi Rules, 2014 (as amended by Nidhi (Amendment) Rules 2019, 2020, 2022, 2023, 2024).

Regulatory Authority: Ministry of Corporate Affairs (MCA), Government of India. Regional Director for branch approvals and extensions.

Key Provisions: Section 406(1) defines Nidhi and empowers the Central Government to declare companies as Nidhi. Rule 3A requires filing NDH-4 within 120 days of incorporation. If no government decision is conveyed within 45 days, approval is deemed granted under the Nidhi (Amendment) Rules, 2022. Rule 5 prescribes minimum requirements: 200 members, Rs 10 lakh NOF, NOF-to-deposit ratio of 1:20, and 10% unencumbered term deposits. Rule 6 lists prohibited activities: chit funds, hire purchase, leasing, insurance, securities business.

Penalty Provisions: Under Rule 24 of the Nidhi Rules, 2014, contravention of any provision attracts a fine up to Rs 5,000 for the company and every officer in default. Continuing violations attract an additional fine of Rs 500 per day after the first day of non-compliance. Under Section 450 of the Companies Act, 2013, where no specific penalty is prescribed, the company and every officer in default shall be punishable with fine up to Rs 10,000, with Rs 1,000/day for continuing default.

Annual Compliance Filings: Form NDH-1 (annual return of statutory compliance, filed within 90 days of first financial year-end), Form NDH-3 (half-yearly return filed within 30 days of each half-year conclusion, certified by practicing CA/CS/CWA), Annual Return (MGT-7) and Financial Statements (AOC-4) with ROC, and annual statutory audit certificate under Rule 22.

Frequently Asked Questions on Nidhi Company Registration

Get answers to the most common questions about Nidhi company incorporation, compliance, and operations in India.

Quick Answers

Can a Nidhi company accept public deposits? No. Nidhi companies can only accept deposits from and lend to their enrolled members under Section 406.

What is the NOF-to-deposit ratio? 1:20. For every Re 1 of Net Owned Funds, the Nidhi can accept up to Rs 20 in deposits under Rule 5(1)(d).

Is Nidhi company formation online? Yes. The entire process is online through the MCA portal using SPICe+ forms.

What forms are filed after Nidhi registration? NDH-4 (declaration), NDH-1 (annual compliance), NDH-3 (half-yearly return), MGT-7 (annual return), AOC-4 (financial statements).

Can foreigners be directors in a Nidhi company? Yes, but at least one director must be resident in India. Foreign directors need a valid passport as additional documentation.

Why Act Now - Nidhi Company Registration

The Nidhi (Amendment) Rules, 2022 significantly tightened requirements including higher capital thresholds and mandatory Central Government declaration. Companies that fail to file NDH-4 within 120 days of incorporation are barred from accepting deposits or lending to members - effectively rendering the entity non-operational.

The 45-day deemed approval window under the 2022 amendments provides certainty, but only for companies that file complete and compliant applications on time.

Start your Nidhi company registration today - Call +91 945 945 6700 or WhatsApp us.

Start Your Nidhi Company Registration Today

Nidhi company registration under Section 406 of the Companies Act, 2013 provides a legitimate and RBI-exempt pathway for entrepreneurs to establish a mutual benefit lending and deposit business in India. Governed by the Nidhi Rules, 2014 (as amended through 2022 and 2024), the process requires careful navigation of capital requirements, membership thresholds, and post-incorporation compliance filings.

Patron Accounting's CA and CS team brings 15+ years of company registration expertise, ensuring first-time approval of SPICe+ applications, timely NDH-4 declaration, and ongoing compliance management. With offices in Pune, Mumbai, Delhi, and Gurugram, we serve promoters across India with both in-person and remote support.

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Content Created: 10 March 2026  |  Last Updated: 10 March 2026  |  Next Review: 10 September 2026  |  Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed every 6 months by our CA and CS team. Review triggers include MCA notification amending Nidhi Rules, change in capital requirements, new NDH form version, or Companies Amendment Act provisions.

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