A Nidhi company is a type of co. In the ndian non-banking finance sector, recognized under section 406 of the companies Act, 2013. Their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit company.

Conditions under which a Nidhi Company Registration can be done.

There are a few conditions which need to be fulfilled when it comes to setting up of a Nidhi Company. These are as follows:

  • A minimum of 7 Members are required to register a Nidhi Company.
  • Minimum of 3 Directors are required.
  • It shall have a minimum paid up share capital of INR 5 lakh and it shall have no preference shares issued.
  • Nidhi Company shall not have any object in its Memorandum of Association other than the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.
  • Every Nidhi Company shall, within a period of 1 year from the date of its incorporation, ensure that it has;
  • Not less than two hundred members;
  • The minimum Net Owned Fund (Paid Up Share Capital + Free Reserves) for such kind of a company should be INR 10 lakh or more and
  • The ratio of Net Owned Funds to Deposits should be 1:20 i.e. if the net owned funds is INR 10 Lakh then your total deposit limit would be INR 2 Crore.
  • Unencumbered term deposits of not less than ten per cent. of the outstanding deposits as specified
  • A Nidhi Company should not admit a Body Corporate, a Trust or a Minor as a member. Its sole purpose should be to serve individuals and their needs.

# Obtain Correct Licensing

Complete all pre-licensing preparations. Anyone in the mortgage industry, business and personal, must meet all background and credit verifications.

# Establish Your Lending Guidelines and Financing

Starting your own loan company doesn’t necessarily mean you need to have all the money yourself. Establish relationships with banks, credit unions, car dealers and investors. After you have your financing in place, establish your lending guidelines.

# Adopt Good Business Practices

Regardless of the type of loans you offer, any advertising and loan terms must meet rules and regulations. Protect your clients’ personal and private data. Allow the underwriting – not personal relationships – to make lending determinations to avoid discriminatory practices. Read and understand the basics of the relevant Acts.

Nidhi Company Registration Process

Approval of the Name through ‘RUN’ facility


Digital Signature Certificate (DSC)

Filing of SPICE32 Form

After the approval of the name and the obtaining of the DSC, Form SPICE32 needs to be filled up with the following attachments.

  • Memorandum of Association
  • Articles of Association
  • PAN Card of the Subscribers
  • ID Proof of First Directors
  • Address Proof of First Directors
  • Address Proof of Registered Office (Rent Agreement/Sale Deed)
  • Latest Utility Bill of Registered Office (Electricity/Telephone/Gas)
  • NOC from the Owner of Registered Office.
  • Consent and Declaration from first Director in form DIR-2
  • Self-Declaration from First Directors and Subscribers in form INC-9

Approval and Certificate of Incorporation

How much fund is required to start a Nidhi Company?

A minimum of 5 lakh rupees, is required as the equity share capital to start a Nidhi company. Nidhi company can’t issue preference shares.

Lending is a highly regulated industry. Start off by registering your business. Pay the registration fees, and then get a tax identification number. These two are basic items in registering any business legally and are necessary for licensing.

Nidhi Software

HBF DIRECT LIMITED Help you to get Nidhi Software, website, HRM & other related software free of cost . 

We help you to establish your NIDHI Company as a Proper mini Bank, where your client can transfer/receive funds. We can help you to create a Banking Mobile App with all related feature (your own IFSC code )

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