{"id":12854,"date":"2017-02-17T05:50:09","date_gmt":"2017-02-17T05:50:09","guid":{"rendered":"https:\/\/www.legalraasta.com\/blog\/?p=12854"},"modified":"2026-04-07T17:17:46","modified_gmt":"2026-04-07T11:47:46","slug":"run-nidhi-company","status":"publish","type":"post","link":"https:\/\/www.legalraasta.com\/blog\/run-nidhi-company\/","title":{"rendered":"How to run a Nidhi Company?"},"content":{"rendered":"<p><strong>STARTING A NIDHI COMPANY-<\/strong><\/p>\n<p>The word \u2018Nidhi\u2019 is derived from a root word traditionally meaning \u2018treasure\u2019. In the recent context of Indian financial sector, it refers to mutual benefit society notified by the Central government as a Nidhi Company. Their main aim is of cultivating the habit of thrift and savings among its members.<\/p>\n<p>The companies under Nidhi business i.e. borrowing from members and lending to members only, are under Nidhi Permanent Fund. Nidhi companies are most popular is south India, and 80% of<strong> <a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\">Nidhi company in India<\/a><\/strong> are located in Tamil Nadu. Their dealings are restricted only to the members and they are therefore regarded as mutual benefit societies. The source of funds is from the members itself. The loans are given at comparatively less rate of interest than the banks in India.<\/p>\n<p><strong><a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\">NIDHI COMPANY REGISTRATION<\/a><\/strong><\/p>\n<ul>\n<li>Nidhi Company is registered as \u2018Public Company\u2019. The registration process is somewhat same as the public companies except for some additional steps.<\/li>\n<li>Nidhi Company should be incorporated as a <a href=\"https:\/\/www.legalraasta.com\/public-limited-company-registration\/\"><strong>Public Limited Company<\/strong><\/a>. It needs at least of 3 directors, 7 shareholders and a minimum capital of Rs.10 lakh.<\/li>\n<li>The company should not issue preference shares<\/li>\n<li>A company incorporated as a Nidhi part should have \u2018Nidhi Limited\u2019 as part of its name<\/li>\n<li>The Net Owned Funds should be 10 lakhs or more<\/li>\n<li>Company should have unencumbered deposits of not less than 10% of the outstanding deposits<\/li>\n<li>The ratio of Net owned Funds to deposits should not exceed the ratio 1:20<\/li>\n<\/ul>\n<p><strong>PROHIBITIONS-<\/strong><\/p>\n<ul>\n<li>Continuing business of chit fund, leasing finance, insurance, hire purchase or acquisition of securities issued by any corporate body<\/li>\n<li>Opening current accounts with its company members<\/li>\n<li>Business other than borrowing and lending in its own name. <strong><a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\">Nidhi Company<\/a><\/strong> offers lockers on rent to its members subjected to rental income from such facilities not exceeding 20% of the gross income of the Nidhi at any time during the ongoing financial year<\/li>\n<li>Accept deposits from any other members, other than its own members<\/li>\n<li>Pledge any of assets lodged by its own members as security<\/li>\n<li>Take lend or deposit money to any corporate body<\/li>\n<li>Enter into partnership in its activities of lending and borrowing<\/li>\n<li>Pay any brokerage or incentives for mobilizing deposits from members<\/li>\n<\/ul>\n<p><strong>MEMBERSHIP-<\/strong><\/p>\n<p>The membership of a Nidhi Company is restricted to individuals. A Nidhi Company must never admit any corporate body or any trust as its member. A teenager shall also not be allowed to become a member of Nidhi Company.<\/p>\n<p>However, deposits can be accepted in the name of a minor, only if they are made by the legal guardian who is a member of Nidhi. Every <strong><a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\">Nidhi Company in India<\/a><\/strong> must ensure that its membership does not reduce to less than two hundred members at any point of time.<\/p>\n<p><strong>SHARE CAPITAL AND ALLOTMENT-<\/strong><\/p>\n<p>Every Nidhi shall issue equity shares of nominal value of not less than ten rupees each. No service charge shall be put upon for issue of shares of the company. Nidhi shall allow at least a minimum of ten equity shares equivalent to one hundred rupees. At least one equity share of ten rupees should be allotted to a savings account holder and a recurring deposit holder.<\/p>\n<p>Now, <a href=\"https:\/\/www.legalraasta.com\/register-nidhi-company\/\">Register Nidhi Company Online<\/a> with the help of LegalRaasta.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>STARTING A NIDHI COMPANY- The word \u2018Nidhi\u2019 is derived from a root word traditionally meaning \u2018treasure\u2019. In the recent context of Indian financial sector, it refers to mutual benefit society notified by the Central government as a Nidhi Company. Their main aim is of cultivating the habit of thrift and savings among its members. The companies [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":12856,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[556],"tags":[],"class_list":["post-12854","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-articles"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to run a Nidhi Company? | learn | LegalRaasta<\/title>\n<meta name=\"description\" content=\"Nidhi companies are most popular is south India, and 80% of Nidhi company in India are located in Tamil Nadu. 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