Nidhi Company
Registration Service
Complete Guide

DSC is mandatory for all directors to sign MCA forms digitally. Nidhi company requires MINIMUM 3 DIRECTORS (same as Public Ltd company). Obtain Class 2 or Class 3 DSC from licensed Certifying Authorities (eMudhra, Sify, nCode). Documents required: PAN card, Aadhaar card, passport-size photograph, email ID, mobile number. DSC is issued on USB token and valid for 1-2 years. Cost: ₹1,000-2,000 per director. Taxvio assists in bulk DSC procurement at discounted rates.

DIN is a unique 8-digit ID required for every director. Apply via Form DIR-3 on MCA portal using DSC. Documents required: PAN, Aadhaar, address proof (bank statement/utility bill <2 months), photograph, email, mobile. DIN is auto-approved within 1-2 days if documents are correct. Important: For Nidhi company, ensure at least 2 directors are RESIDENT OF INDIA (stayed in India for 182+ days in previous year) — mandatory as per Section 149(3). If director already has DIN from previous directorship, same DIN can be reused. Taxvio handles DIN applications for all directors simultaneously.

Apply for name approval via Form INC-1 (RUN - Reserve Unique Name) on MCA portal. Nidhi company name MUST end with 'Nidhi Limited' (not 'Private Limited' or just 'Limited'). Example: 'ABC Nidhi Limited', 'XYZ Mutual Benefit Nidhi Limited', 'Community Savings Nidhi Limited'. Name guidelines: (1) Must be unique (not identical/similar to existing companies/trademarks), (2) Must end with 'Nidhi Limited', (3) Should reflect community/mutual benefit nature, (4) Cannot use restricted words (Bank, Insurance, Government, etc.) without approval, (5) Can have up to 2 proposed names in order of preference. MCA checks name against existing companies and trademark database. If approved: Name is reserved for 20 days (must file incorporation within 20 days, extendable by 20 more days). If rejected: Reapply with different names (no extra fee). Taxvio conducts name search and suggests 5+ available names with 'Nidhi Limited' suffix before filing RUN.

Nidhi companies require minimum ₹5 lakh PAID-UP EQUITY SHARE CAPITAL deposited in bank BEFORE incorporation. Process: (1) Open a CURRENT ACCOUNT in the name of 'PROPOSED [Company Name] Nidhi Limited' in any scheduled bank (HDFC, ICICI, SBI, etc.). (2) Deposit ₹5 lakh (or more) via NEFT/RTGS/Cheque from shareholders' bank accounts. Each subscriber must deposit their subscribed amount from their OWN account. (3) Obtain 'Certificate of Deposit' or 'Banker's Certificate' from bank confirming deposit amount and account opening. This certificate is uploaded with SPICe+ form. Example: If authorized capital is ₹10 lakh (1,00,000 shares of ₹10 each), and 7 shareholders subscribe 50,000 shares (₹5 lakh paid-up), then ₹5 lakh must be deposited. Important: Capital cannot be withdrawn until Certificate of Incorporation is issued. Taxvio assists with bank account opening and capital infusion documentation.

MOA (Memorandum of Association) and AOA (Articles of Association) are constitutional documents defining company's objectives and governance. For Nidhi company, these documents must include SPECIFIC NIDHI OBJECTIVES as per Nidhi Rules 2014: (1) MOA (Memorandum of Association): Contains: (a) Name clause (company name with 'Nidhi Limited' suffix), (b) Registered office clause (state where office is located), (c) OBJECTS CLAUSE (CRITICAL for Nidhi): MAIN OBJECTS must state: 'To carry on the business of a Nidhi company as defined under Section 406 of the Companies Act, 2013 and Nidhi Rules, 2014, for the purpose of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.' 'To accept deposits from members and pay interest thereon.' 'To lend money to members on such terms and conditions as may be decided by the Board of Directors.' 'To issue shares to members and pay dividends from profits.' ANCILLARY OBJECTS: Can include investing in government securities, fixed deposits, supporting member welfare activities, etc. (d) Liability clause (limited liability of members), (e) Capital clause (authorized capital structure — e.g., ₹10 lakh divided into 1,00,000 equity shares of ₹10 each). (2) AOA (Articles of Association): Contains internal management rules: (a) MEMBERSHIP CLAUSE: 'Every depositor and borrower of the Nidhi company shall be a member (shareholder). Non-members cannot deposit or borrow.' (b) Share capital and rights (voting rights, dividend rights, minimum 1 share per member), (c) Calls on shares, forfeiture, transfer/transmission of shares, (d) Board of Directors — appointment, removal, rotation, powers, (e) Board meetings — quorum, notice, voting, (f) General meetings — AGM, EGM, notice, quorum, voting, (g) Dividend distribution, reserves, accounts, audit, (h) DEPOSIT AND LENDING CLAUSES: 'Deposits will be accepted only from members', 'Loans will be given only to members', 'Interest rates on deposits and loans will be decided by Board', (i) NET OWNED FUNDS (NOF) maintenance clause, (j) Compliance with Nidhi Rules 2014. Taxvio prepares CUSTOMIZED MOA & AOA with NIDHI-SPECIFIC clauses compliant with Nidhi Rules 2014 and MCA guidelines.

Nidhi company incorporation is done via SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) - Form INC-32 on MCA portal. SPICe+ is an INTEGRATED form combining: (1) Company incorporation application, (2) DIN allotment for directors (if not already obtained), (3) PAN application, (4) TAN application, (5) EPFO registration, (6) ESIC registration, (7) AGILE-PRO (for GST, Shops & Establishment, profession tax in linked state portal). SPICe+ form includes: Part A - RUN (name reservation - already filed in Step 3), Part B - Company details: (a) Company category: Select 'Company limited by shares' → Sub-category: Select 'Nidhi company under Section 406', (b) Registered office address (complete address with pincode, state), (c) Authorized capital and shareholding pattern (equity shares, number of shares, value per share), (d) Details of subscribers (initial 7+ shareholders) — name, PAN, Aadhaar, address, email, mobile, shares subscribed, amount paid, (e) Details of first directors (minimum 3) — name, DIN, address, consent, (f) Main business activity: 'Lending and borrowing activities as Nidhi company', (g) Attachments: (i) MOA (with Nidhi objectives — signed by all subscribers), (ii) AOA (with Nidhi clauses — signed by all subscribers), (iii) Proof of registered office (rent agreement + NOC / sale deed + electricity bill), (iv) Utility bill of registered office (<2 months old), (v) BANKER'S CERTIFICATE confirming ₹5 lakh paid-up capital deposit, (vi) PAN, Aadhaar, address proof, photographs of all directors and subscribers, (vii) Consent to act as director (DIR-2), (viii) Declaration by professionals (INC-9). SPICe+ form is digitally signed by ALL DIRECTORS using DSC and filed on MCA portal. MCA Fee: Based on authorized capital (e.g., ₹5-10 lakh = ₹5,600 fee; ₹10-50 lakh = ₹11,200). MCA scrutinizes application (7-10 days). If queries/defects, MCA issues query notice — respond within 7 days. Taxvio ensures ERROR-FREE filing with complete documentation.

Upon approval of SPICe+ form, MCA issues Certificate of Incorporation (COI) in Form INC-11. The certificate contains: (1) Company name (ending with 'Nidhi Limited'), (2) CIN (Corporate Identity Number - 21-digit unique ID starting with 'U' for Nidhi companies), (3) Date of incorporation, (4) Registered office address, (5) Authorized capital, (6) Digital signature of Registrar of Companies (ROC). Certificate of Incorporation is the LEGAL PROOF that your Nidhi company now exists under the Companies Act, 2013. Download COI from MCA portal. IMPORTANT: Nidhi company can commence business immediately after incorporation (unlike Public Ltd which requires INC-20A). However, Nidhi MUST comply with Nidhi Rules 2014 within 1 year (200 members, ₹10 lakh NOF) to retain Nidhi status.

PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) are auto-generated by Income Tax Department upon incorporation (if SPICe+ Part B was filed). PAN card is sent to company's registered office via India Post (7-15 days). TAN is sent via email. If not received within 15 days, download e-PAN from Income Tax e-filing portal (Login → Services → Download e-PAN → Enter CIN → OTP → Download). PAN is required for: Bank account opening, GST registration, Income tax return filing, TDS compliance. TAN is required for: TDS deduction and deposit, Quarterly TDS returns, Form 16/16A issuance.

Form NDH-1 is an INTIMATION form that must be filed with MCA within 90 DAYS of incorporation to inform MCA that the company intends to function as a NIDHI COMPANY. NDH-1 contains: (1) Company name and CIN, (2) Date of incorporation, (3) Registered office address, (4) Details of directors (name, DIN, email, mobile), (5) Details of shareholders (name, number of shares held), (6) Authorized capital and paid-up capital, (7) Declaration that company will comply with Nidhi Rules 2014, (8) Declaration that company will achieve 200 members and ₹10 lakh NOF within 1 year. NDH-1 is a SIMPLE intimation — no attachments required. File online on MCA portal. Fee: ₹200. MCA acknowledges NDH-1 filing (no approval needed — just acknowledgment). Important: If NDH-1 is not filed within 90 days, company loses Nidhi status and becomes regular Public Ltd company (subject to higher compliances). Taxvio files NDH-1 within 15 days of incorporation to ensure timely compliance.

After incorporation, following immediate compliances required: (1) First Board Meeting (within 30 days): Convene first Board meeting to: (a) Appoint first statutory auditor (Chartered Accountant), (b) Appoint additional directors if any, (c) Approve company seal, (d) Approve opening of current bank account, (e) Ratify registered office address, (f) Approve preliminary expenses, (g) APPROVE MEMBER ONBOARDING PLAN (target 200 members in 1 year), (h) APPROVE DEPOSIT AND LENDING POLICY (interest rates, loan terms, security requirements). Prepare Minutes of Board Meeting and file Form MGT-14 with ROC within 30 days. (2) Open Current Bank Account: Submit to bank: Certificate of Incorporation, PAN card, Board resolution, KYC of directors (PAN, Aadhaar, photograph), Registered office address proof. Banks conduct verification and open account within 5-7 days. (3) Issue Share Certificates: Allot shares to subscribers (initial 7 shareholders) and issue physical share certificates within 60 days. (4) Maintain Statutory Registers: Purchase and maintain: Register of Members, Register of Directors, Register of Deposits (Nidhi-specific), Register of Loans (Nidhi-specific), Minutes Book. (5) Member Recruitment Drive: Start recruiting members to reach 200 within 1 year. Each new member must: (a) Apply for membership, (b) Purchase at least 1 share (pay share value), (c) Fill KYC form (PAN, Aadhaar, address proof, photograph), (d) Receive share certificate. Taxvio provides POST-INCORPORATION COMPLIANCE KIT with statutory registers, share certificates, Board meeting templates, and member onboarding formats.

This is the MOST CRITICAL compliance for Nidhi company. Within ONE YEAR of incorporation, Nidhi must: (1) Achieve Minimum 200 MEMBERS (Shareholders): Each member must hold at least 1 equity share. Members can be recruited via: (a) Community outreach (local area, housing society, employee groups), (b) Member referrals (existing members bring new members), (c) Advertising (within district limits), (d) Deposit mobilization (people who want to deposit become members by buying shares first). Member onboarding process: Collect application form → KYC documents (PAN, Aadhaar, address proof) → Share subscription form → Payment of share value → Issue share certificate → Update Register of Members. (2) Achieve ₹10 LAKH NET OWNED FUNDS (NOF): NOF = Paid-up equity capital + Free reserves - Accumulated losses - Intangible assets. Example calculation: At incorporation: Paid-up capital = ₹5 lakh, Reserves = 0, Losses = 0, Intangible = 0 → NOF = ₹5 lakh. After 1 year: If Nidhi earned ₹6 lakh profit and retained ₹5 lakh as reserves → NOF = ₹5 lakh (capital) + ₹5 lakh (reserves) = ₹10 lakh ✓. If Nidhi incurred ₹2 lakh loss → NOF = ₹5 lakh - ₹2 lakh = ₹3 lakh ✗ (non-compliant). Ways to build NOF: (a) Earn profits from interest spread (charge higher interest on loans than paid on deposits), (b) Issue more shares to members (increase paid-up capital), (c) Transfer profits to reserves instead of distributing as dividends. (3) Maintain 10% Deposits in Unencumbered Term Deposits: At least 10% of total deposits accepted from members must be invested in unencumbered term deposits with scheduled commercial banks. Example: If total deposits = ₹50 lakh, minimum ₹5 lakh must be in bank FDs (cannot be pledged/mortgaged). Taxvio provides MEMBER ONBOARDING SUPPORT and NOF COMPLIANCE STRATEGY to help you achieve 200 members and ₹10 lakh NOF targets within 1 year.

Form NDH-4 is a DECLARATION form that must be filed with MCA AFTER achieving 200 members and ₹10 lakh NOF (within 1 year of incorporation). NDH-4 contains: (1) Company name and CIN, (2) Date of incorporation, (3) Declaration that company has: (a) Minimum 200 members (shareholders), (b) Net Owned Funds of ₹10 lakh or more, (c) 10% of deposits invested in unencumbered term deposits with banks, (d) Ratio of NOF to deposits is 1:20 or better. (4) Details of members (name, address, shares held — upload member list), (5) Details of deposits accepted and loans given (upload summary), (6) Audited financial statements (Balance Sheet, P&L, Cash Flow), (7) Auditor's certificate confirming compliance with Nidhi Rules 2014, (8) Declaration by director(s) and company secretary (if appointed) that all information is true. Attachments with NDH-4: (a) Audited financial statements (signed by auditor), (b) Register of Members (showing 200+ members), (c) Register of Deposits and Loans, (d) Bank certificate for 10% unencumbered term deposits, (e) Board resolution approving NDH-4 filing. NDH-4 is digitally signed by directors using DSC and filed on MCA portal. Fee: ₹10,000. MCA scrutinizes NDH-4 (30-45 days). If compliant, MCA issues acknowledgment confirming Nidhi status. If non-compliant, MCA may issue show-cause notice or withdraw Nidhi status. Important: If NDH-4 is not filed within 1 year, or if 200 members/₹10 lakh NOF targets are not achieved, company LOSES Nidhi status and becomes regular Public Ltd company (with higher compliance burden and possible penalties). Taxvio assists with NDH-4 filing, audit coordination, and compliance documentation.

Nidhi companies must file following annual compliances with ROC (same as Public Ltd companies): (1) Annual Return (Form MGT-7): Due within 60 days of Annual General Meeting (AGM). Must be certified by Company Secretary (CS). (2) Financial Statements (Form AOC-4): Balance sheet, profit & loss account, cash flow statement, auditor's report. Due within 30 days of AGM. (3) Annual General Meeting (AGM): MANDATORY within 6 months of financial year end. All members must be invited (21 days notice). (4) Board Meetings: Minimum 4 Board meetings per year (one every quarter) with gap not exceeding 120 days. (5) Income Tax Return (ITR-6): Due by 31st October every year. (6) TDS Returns (quarterly): If deducting TDS on interest payments, file 26Q, 27Q. (7) Auditor's Report: Statutory audit by CA mandatory. Auditor must certify compliance with Nidhi Rules 2014 in audit report. (8) NIDHI-SPECIFIC COMPLIANCES: (a) Maintain 200+ members at all times (if member count falls below 200, Nidhi status is at risk), (b) Maintain ₹10 lakh+ NOF at all times, (c) Maintain 10% deposits in unencumbered bank FDs, (d) File NDH-2 (Annual Return specific to Nidhi) with MCA (due by 30th June every year) — contains details of deposits, loans, members, NOF, compliance with ratios, (e) NOF-to-Deposits Ratio: Ensure deposits do not exceed 20x of NOF (if NOF = ₹10 lakh, max deposits = ₹2 crore; if deposits exceed, either increase NOF or stop accepting new deposits), (f) Interest Rate Compliance: Interest paid on deposits and charged on loans must be within RBI guidelines (currently, deposit interest capped at RBI repo rate + 3%, loan interest cannot exceed deposit interest + 5%). Penalties for non-compliance: ₹100-500 per day (company) + ₹100-500 per day (each director) depending on default. If Nidhi violates Nidhi Rules repeatedly, MCA can withdraw Nidhi status and convert company to regular Public Ltd (or even prosecute directors under Section 447 for fraud). Taxvio offers ANNUAL COMPLIANCE PACKAGE for Nidhi Companies (₹49,999/year) covering: MGT-7, AOC-4, ITR-6, NDH-2, Board meetings, AGM support, and compliance calendar.