Nidhi Company Incorporation Road Map in 2025 Simple, Practical & Step-by-Step Guide for New Businesses A Nidhi Company is a special category of company registered under the Companies Act, 2013, primarily for encouraging savings and lending among its members only. It operates similar to a small community-based finance model where deposits and loans are managed […]

Introduction Nidhi Companies have gained popularity in India as an easy and trusted way to promote savings and provide loans among members. However, many entrepreneurs, directors, and depositors are often confused about the rules, registration process, compliances, and risks related to Nidhi Companies. To clear this confusion, here is a complete FAQ guide that answers

Nidhi Company vs Microfinance NBFC – Key Differences Introduction In India, financial inclusion has become a major focus over the past few decades. Two popular models that serve low-income groups and small borrowers are Nidhi Companies and Microfinance Non-Banking Financial Companies (NBFC-MFIs). At first glance, both seem similar — they encourage savings and provide loans

Introduction When planning to incorporate a company in India, entrepreneurs and community groups often face the dilemma of choosing the right structure. Two popular options are the Nidhi Company and the Section 8 Company. Although both are registered under the Companies Act, 2013, their objectives, operations, and benefits are very different. While a Nidhi Company

Introduction Nidhi Companies in India are governed by the Companies Act, 2013 and the Nidhi Rules, 2014, with specific forms prescribed by the Ministry of Corporate Affairs (MCA). These forms ensure transparency, compliance, and monitoring of Nidhi operations. Every director or professional handling Nidhi Company compliance must be aware of four critical forms – NDH-1,

Introduction When it comes to community-based savings and lending, two common names often emerge in India: Nidhi Company and Cooperative Society. Both models are designed to promote financial inclusion, encourage savings, and provide loans at reasonable interest rates. However, the choice between the two depends on factors like legal recognition, compliance, operational freedom, and the

What is a Nidhi Company? A Nidhi Company is a category of NBFC registered under the Companies Act, 2013 to promote savings and mutual lending among members. Unlike banks, it cannot deal with outsiders and operates only on the principle of “for members, by members.” Prohibited Activities: Nidhis cannot operate chit funds, leasing, hire purchase,

Introduction A Nidhi Company is a type of company formed with the objective of cultivating the habit of thrift and savings among its members and lending funds to them for their mutual benefit. Unlike banks and finance companies that serve the general public, Nidhis operate in a closed circle — they accept deposits only from

Executive summary Rule 20 of the Nidhi Rules is the backbone of how you recognise income and provide for credit risk. It tells you: (i) when to stop counting interest as income; (ii) how to classify mortgage-backed loans and create provisions; (iii) what to disclose in the notes; and (iv) the special, time-bound treatment for

Introduction Nidhi Companies are a unique form of Non-Banking Financial Companies (NBFCs) that promote savings and mutual lending among members. While any public company can register as a Nidhi, it does not automatically get recognized as one. For this, filing Form NDH-4 with the Ministry of Corporate Affairs (MCA) is mandatory. NDH-4 is the application