1. Membership and Shareholding Regulations

• Only individuals are allowed to become members of a Nidhi Company.
  
• A member must subscribe to a minimum number of equity shares, as prescribed in the Articles of Association.
  
• Companies, trusts, and other corporate entities are not eligible for membership.
  
• A Nidhi Company must have at least 200 members within one year of incorporation.
  
• Every director must also be a member and hold qualifying shares.
  

2. Deposit and Lending Controls

• Deposits can be accepted only from members, and in the form of savings, fixed, or recurring deposits.
  
• The total deposit acceptance must not exceed 20 times the Net Owned Funds of the company.
  
• At least 10% of total deposits must be maintained as unencumbered term deposits with a scheduled bank.
  
• Loans must be issued to members only and must be fully secured.
  
• The interest on loans must not exceed 7.5% above the highest deposit rate offered.
  

3. Restrictions on Business Activities

• A Nidhi Company is not permitted to carry out business like chit funds, hire-purchase, leasing, or insurance.
  
• It cannot issue preference shares, debentures, or other financial instruments.
  
• Raising funds from the general public or external investors is strictly prohibited.
  
• All operations must be conducted within the member circle only.
  
• The company is not allowed to appoint agents or brokers for business promotion.
  

4. Operational and Governance Structure

• The company must have a minimum of 3 directors and comply with governance rules under the Companies Act.
  
• All directors must be members and serve for a maximum tenure of 10 years, with a 2-year cooling-off period thereafter.
  
• Board meetings and member meetings must be conducted regularly and documented properly.
  
• The company must maintain statutory registers, books of accounts, and records.
  
• Internal decisions, policies, and operations must follow the company’s MOA and AOA.
  

5. Compliance and Filing Obligations

• Form NDH-1 must be filed within 90 days of incorporation to declare compliance.
  
• Form NDH-3 must be submitted every six months with a deposit and member details.
  
• Form AOC-4 and MGT-7 must be filed annually for financial statements and returns.
  
• Audited financials and statutory records must be kept ready for inspection.

• Continuous adherence to the Nidhi Rules, 2014, and the Companies Act, 2013, is mandatory to retain legal status.