Nidhi Company, a non-banking finance sector company, regulated under Section 406 of the Indian Companies Act, 2013, accepts deposits from and lends to its members only, for their mutual benefit.
A Nidhi Company is a non-banking financial company (NBFC) operating in India, governed by the Nidhi Rules, 2014, and recognised under Section 406 of the Companies Act, 2013. Functioning as a public limited company, its core objective revolves around promoting thrift and savings among its members while providing financial assistance to them through lending.
The following documents has to be submitted from all the directors
By 2023, Nidhi firms having a share capital of ₹10 lakh or more were required to obtain a self-declaration from the central government before beginning operations. By establishing e-Nidhi Rules, Nidhi firms will be governed in a transparent, accountable, and democratic manner. Companies that match the criteria must file an application in Form NDH-4, including having a minimum of 200 members, a net owned fund of at least ₹20 lakh, and being considered as a fit and proper person. The application is judged successful after 45 days have elapsed without a response from the government. Existing Nidhi enterprises have 18 months to comply with these rules before new businesses are required to do so.
The minimum requirements include:
Minimum of 7 shareholders
Minimum of 3 directors
Minimum capital requirement of Rs. 5 lakhs
The company should have "Nidhi Limited" as part of its name
It should have at least 200 members within one year of incorporation
Obtaining Digital Signature Certificate (DSC) for directors
Obtaining Director Identification Number (DIN) for directors
Reservation of the company name
Drafting of Memorandum of Association (MOA) and Articles of Association (AOA)
Filing of incorporation documents with the Registrar of Companies (RoC)
Payment of registration fees
Obtaining the Certificate of Incorporation.