1. Secured Loans to Members Nidhi Companies are permitted to provide loans only to their registered members. All loans must be secured with acceptable collateral as per the Nidhi Rules, 2014. Unsecured lending is strictly prohibited. The security must be sufficient to...

1. Basis of Loan Limits Loan limits in a Nidhi Company are based on the Net Owned Funds (NOF) of the company. The maximum amount that can be lent to a member depends on the total NOF available. The Nidhi Rules, 2014 specify clear thresholds linked to NOF brackets....

1. Interest on Loans to Members The primary source of income for a Nidhi Company is the interest earned on loans provided to its members. Loans are issued against security such as gold, fixed deposits, or immovable property. The company charges interest at rates...

1. Membership and Shareholding Rules Only individual persons can become members of a Nidhi Company. A member must subscribe to a minimum number of equity shares as specified in the Articles of Association. Minors, partnership firms, companies, and trusts are not...

1. SPICe+ Part A – Name Reservation This form is used to apply for the reservation of the company name. The proposed name must include “Nidhi Limited” and comply with MCA naming guidelines. It must be unique and not identical to any existing company or trademark. Once...

1. Filing a Statutory Declaration to ROC Within 90 days of incorporation, the company must file Form NDH-1 with the Registrar of Companies. NDH-1 declares that the company has complied with the minimum member and fund requirements. It must be certified by a practising...

1. Preliminary Preparation and Digital Documentation Identify a minimum of 7 members and 3 directors to form the Nidhi Company. Obtain Digital Signature Certificates (DSC) for all proposed directors. Apply for a Director Identification Number (DIN) through the SPICe+...

1. Eligibility Criteria for Membership Only individual persons are allowed to become members of a Nidhi Company. Companies, trusts, partnership firms, and other artificial entities are not eligible. The person must be a resident of India with valid identity and...

1. Simple and Low-Cost Registration Process Registering a Nidhi Company involves fewer regulatory hurdles compared to other NBFCs. No approval from the Reserve Bank of India is required to commence operations. The registration process is conducted through the Ministry...

1. Definition of Object Clause The object clause in the Memorandum of Association (MOA) defines the main purpose for which the Nidhi Company is formed. It sets legal boundaries for the activities the company can undertake. This clause ensures the company operates only...