Understanding the Process of Nidhi Company Registration

Insights by CA Adda - Nidhi Company Registration Consultant in India

Are you considering forming a Nidhi Company in India? Nidhi companies, known for their role in cultivating the habit of thrift and savings among their members, have become increasingly popular. These companies operate as non-banking financial entities, borrowing and lending money among their members. In this blog, we will walk you through the step-by-step process of Nidhi Company registration, highlighting key aspects to ensure a smooth registration experience.

What is a Nidhi Company?

A Nidhi Company is a type of non-banking financial company (NBFC) governed by the Ministry of Corporate Affairs (MCA) and regulated under Section 406 of the Companies Act, 2013. The primary objective of a Nidhi Company is to cultivate the habit of saving among its members and to work for their mutual benefit. Nidhi companies are not allowed to engage in the business of chit funds, hire purchase finance, leasing finance, insurance, or acquisition of securities issued by any body corporate.

Advantages of Forming a Nidhi Company

• Encourages Savings: Promotes a habit of savings among its members.
• Easy to Manage: Simple procedures and regulations.
• Limited Liability: Protects personal assets of members.
• No External Involvement: Works solely for the benefit of its members.
• Minimal Risk: Safe and secure way to finance through mutual benefit schemes.

Prerequisites for Nidhi Company Registration

Before proceeding with the registration process, ensure the following prerequisites are met:

• Minimum Members: At least seven members are required, with three of them serving as directors.
• Capital Requirement: A minimum paid-up equity share capital of Rs. 10 lakhs.
• Unique Name: The company