Nidhi Limited Company: Members, Directors and Structure

A nidhi limited company is a public company under the Companies Act, 2013, built around a group of members who pool savings and lend to each other. The word Limited is not decoration. It tells you the company is a public one, and the Nidhi Rules require the name to end with “Nidhi Limited”. This post covers members, directors and the basic structure, and links back to the Nidhi company registration guide for the filing steps.

In this guide

• The basic structure
• Members
• Directors and the board
• Rules that shape the structure
• Funding the structure
• FAQs

The basic structure

For nidhi limited registration, the starting requirements are:

• Public company status.
• At least 7 members and at least 3 directors.
• Minimum paid-up equity share capital of Rs 10 lakh (it was Rs 5 lakh before 19 April 2022).
• Name ending with “Nidhi Limited” and a single object of thrift and savings among members.

No preference shares are allowed. The meaning and features of this structure are explained in what is a Nidhi company.

Members

Members are the owners and also the customers. They buy equity shares, deposit money and borrow. Deposits and loans are only for members, so every depositor and borrower must first be on the register. For the declaration under NDH-4, the company should have at least 200 members. A member cannot transfer more than 50% of the shareholding while a loan or deposit with the Nidhi is outstanding. Who qualifies is discussed in who can be a member of a Nidhi company.

Directors and the board

The board has at least three directors, and directors need DINs and annual KYC. The Rules expect promoters and directors to meet fit and proper criteria at the NDH-4 stage, so a person with a poor legal or financial record can hold up the whole application. Choose directors who can attend meetings, sign papers on time and understand deposit and loan limits.

Directors are responsible for the ratio and compliance conditions too, such as net owned funds to deposits not exceeding 1:20.

Rules that shape the structure

Area	Rule
Deposits	Members only
Loans	Members only
Dividend	Commonly stated cap of 25% of paid-up capital
Regulator	MCA, not RBI

Please read the current Nidhi Rules for exact limits. A summary is in Nidhi Act and Nidhi Rules 2014 explained.

Funding the structure

The capital figures drive almost every decision on member numbers and loan size. See capital needed for a Nidhi company for the working. If you want us to set up the company and structure for you, see our Nidhi registration service.

Related reading

• Nidhi Company Registration in India: Process, Documents, Cost and Timeline
• Who Can Be a Member of a Nidhi Company
• Capital Needed to Start a Nidhi Company
• What Is a Nidhi Company? Meaning, Features and How It Works
• Nidhi Act and Nidhi Rules 2014 Explained

Need help with your Nidhi company? See our Nidhi company registration service, call +91 93117 95484, or write to mail@taxhint.in.

FAQs

What is a Nidhi limited company?

It is a public company whose name ends with “Nidhi Limited” and which takes deposits from and lends to its own members to promote thrift and savings.

How many members and directors does a Nidhi Ltd need?

Seven members and at least three directors at incorporation. For the NDH-4 declaration it needs at least 200 members.

Can a Nidhi company be a private limited company?

No. It has to be a public company, and the Rules require the name to end with “Nidhi Limited”.

What is the minimum capital for a Nidhi limited registration?

Rs 10 lakh of paid-up equity share capital, after the 2022 amendment. It also needs net owned funds of Rs 20 lakh when applying under NDH-4.

More in this Nidhi series