What is ROC Filing & Why It’s Necessary?

What is Nidhi Company?

A Nidhi Company is a type of Non-Banking Financial Company (NBFC) that operates exclusively for its members. It is registered under Section 406 of the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA), rather than directly by the Reserve Bank of India (RBI).

The primary function of a Nidhi Company is to accept deposits from members and lend money back to its members. This “for members only” model distinguishes it from other NBFCs and ensures that operations remain community-centric.

Since Nidhi Companies deal only with their members and do not interact with the general public, they enjoy exemptions from core RBI regulations that typically apply to other NBFCs. However, they must still adhere to rules laid down by MCA and maintain transparency in their financial dealings.

The Purpose and Nature of Nidhi Companies

The central purpose of Nidhi Companies is to promote savings and thrift among their members and to facilitate easy, low-interest loans for those same members. They act as mutual benefit societies, pooling deposits and using those funds to lend back within the group.

Key characteristics include:

• Community-Focused Model: Members both contribute and borrow, keeping financial circulation within the group.
  
  
• Limited RBI Oversight: While they fall under the broad category of NBFCs, Nidhi Companies are largely governed by MCA rules.
  
  
• Exemption from Core NBFC Rules: They are not required to obtain RBI approval for incorporation or daily operations.

This makes them a niche but highly effective option for people looking to run community-driven financial institutions.

Benefits of Nidhi Company

• Encourages Savings: Members are motivated to build disciplined saving habits.
• Access to Affordable Credit: Members can borrow at lower interest rates compared to market lenders.
• Limited Regulatory Burden: Exemptions from most RBI regulations make operations simpler.
• Low Risk of Default: Since lending and borrowing are limited to members, risks are lower.
• Simple Incorporation: Registration under MCA is more straightforward than NBFC licensing.
• Legal Status: Recognised as a public company, lending credibility and trust.

Nidhi Company Registration Process

Registering a Nidhi Company in India involves several steps:

1. Obtain DSC & DIN – Digital Signature Certificate for proposed directors.
2. Name Approval – File an application with MCA to get the company name approved (must include “Nidhi Limited”).
3. Draft MOA & AOA – Prepare Memorandum of Association and Articles of Association with clear objectives.
4. Filing for Incorporation – Submit the incorporation application along with required documents through MCA’s SPICe+ form.
5. ROC Scrutiny – Registrar of Companies reviews and verifies the application.
6. Certificate of Incorporation – Once approved, the company is legally formed.
7. GSTIN & Bank Account – Apply for GST (if applicable), and open a current account for operations.

Related Read: How to apply for a Digital Signature Certificate in India

Compliances of the Nidhi Companies

After incorporation, a Nidhi Company must comply with specific filings and statutory requirements:

• NDH-1: Filing of return of statutory compliances within 90 days of the first financial year.
• NDH-2: Application to extend time for compliance (if required).
• NDH-3: Half-yearly return to ROC.
• MGT-7: Annual return filing with MCA.
• AOC-4: Filing of financial statements with MCA.
• Income Tax Compliances: Annual income tax return filing, tax audit (if applicable), TDS deductions, and advance tax payments.

Related Read: ROC Compliance Calendar 2025–2026: Important Filing Due Dates

Nidhi Company Incorporation Requirements

To incorporate a Nidhi Company, certain prerequisites must be met:

Before Registration:

• Minimum 7 members required.
• Minimum 3 directors.
• Minimum ₹5 lakh paid-up equity capital.
• The name must end with “Nidhi Limited”.

Post Registration (within 1 year):

• Minimum 200 members.
• Net Owned Funds (NOF) of at least ₹10 lakh.
• Deposits not to exceed 20 times NOF.
• Maintain at least 10% of deposits as unencumbered deposits (liquid assets).
  
  

Documents Required for Nidhi Company Registration

To register a Nidhi Company, you need the following documents:

• Identity Proof: PAN card of directors and members.
• Address Proof: Aadhaar card, passport, voter ID, or driving license.
• Photographs: Passport-sized photos of all directors and members.
• Office Proof: Rent agreement/ownership papers and utility bill of the registered office.
• Digital Signature Certificate (DSC) of directors.
• Charters: Draft MOA and AOA.
• Foreign Directors: Passport and notarised documents if applicable.

The entire process can be completed online via the MCA portal.

Restrictions on Nidhi Companies

To ensure that Nidhi Companies remain true to their purpose, certain restrictions apply:

• Cannot accept deposits from or lend to non-members.
• Cannot carry out chit funds, hire purchase, leasing finance, or insurance businesses.
• Cannot issue debentures, preference shares, or other securities.
• Cannot advertise for deposits to the general public.
• Cannot open current accounts in the name of members.
• Cannot conduct corporate transactions such as partnerships with other financial institutions.
• Must operate strictly within the framework of member-only deposit and lending.

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Frequently Asked Questions (FAQs)

Eligibility

• Must have business plans for service sector activities or trading or manufacturing activities.
• In the case of an individual applicant, the age range must be between 18 and 65 years.
• Must be a non-corporate and non-farm small and micro-enterprise.

Documents Required for the PMMY Scheme

• Proof of identity
  ‍Self-attested copy of Voter's ID card/Driving Licence/PAN Card/AadhaarCard/Passport/Photo IDs issued by Govt. authority etc.
• Proof of Residence
  ‍Recent telephone bill/electricity bill/property tax receipt (not older than 2 months) / Voter's ID card / Aadhaar Card / Passport of Individual / Proprietor/Partners/Bank passbook or latest account statement duly attested by Bank officials/Domicile certificate/certificate issued by Govt. authority/Local panchayat/Municipality etc.
• Applicant's Recent Photograph (2 copies) 6 months or older.
• Proof of Identity/Address of the Business
  ‍Copies of relevant licenses/registration certificates/other documents pertaining to the ownership, identity, and address of the business unit, if any

Other relevant documents, like proof of category, quotation, etc., are also required during the application process.

Application procedure

If you are eligible, applying for a MUDRA loan is relatively easy and can be done both online & offline.

Online

• Visit the official website of the PMMY-authorized financial institution from which you wish to avail of the Mudra loan.
• Download the relevant form depending on the type of loan (Sishu, Kishore, and Tarun).
• Fill out all the personal and business details and then “Submit” the form.
• Once received, the application form is verified and processed accordingly. Following the verification, the loan amount is approved and disbursed.
• The loan amount can be withdrawn with the help of a MUDRA card issued after the loan approval.

Offline

• Visit a PMMY-authorized bank or NBFC of your choice.
• Fill out the MUDRA loan application form with the required details.
• Submit the application form with a self-written business plan and other documents to substantiate those details.
• After successful document verification, the loan will get approved, and the desired amount will be credited.
• Must have the required infrastructure and targeted acceleration programs.

Benefits of the PMMY Scheme

• MUDRA loans can be taken for small amounts at affordable interest rates; also, the credit guarantee is borne by the Government.
• This scheme could be availed without any collateral or security.
• The Mudra loan scheme in collaboration with the “Make In India” campaign, helps in fostering innovation, facilitating investment, and improving skill development.
• Women Borrowers can avail this scheme with discounted interest rates.
• Relief of up to 1500 Crore will be provided to the Borrowers as Interest Subsidy under the Mudra Shishu Category.

Achievements Under PMMY Scheme

Here’s a table to highlight the achievements under the PMMY scheme in the last 3 years.

Frequently Asked Questions

Types of Company Registrations in India

The choice of business structure impacts both compliance requirements and registration fees. Common options include:

• Private Limited Company (Pvt. Ltd.) – Ideal for startups and growth-oriented businesses seeking investors.
  
  
• Public Limited Company (Ltd.) – Suitable for larger businesses planning to raise capital from the public.
  
  
• Limited Liability Partnership (LLP) – Combines the benefits of a partnership with limited liability.
  
  
• One Person Company (OPC) – Best for solo founders wanting corporate benefits with fewer compliance requirements.
  
  
• Section 8 Company – Non-profit organisations focusing on charitable and social objectives.

Breakdown of Company Registration Fees

The cost of company registration includes government charges, professional fees, and incidental expenses. Below is an approximate breakdown (may vary by state and authorised capital):

• Private Limited Company: ₹7,000 - ₹25,000
  
  
• Public Limited Company: ₹15,000 - ₹30,000
  
  
• Limited Liability Partnership (LLP): ₹6,000 - ₹12,000
  
  
• One Person Company (OPC): ₹7,000 - ₹20,000
  
  
• Section 8 Company: ₹10,000 - ₹15,000

Disclaimer: These are approximate ranges. The final cost depends on factors like authorized capital, the state of registration, and the service provider you choose.

A Detailed Breakdown of Company Registration Cost

To understand the price ranges above, it's essential to know what you're paying for. The total cost is a sum of three key components:

A. Government & Statutory Fees

These are mandatory fees paid to the Ministry of Corporate Affairs (MCA) and state governments.

• SPICe+ Form Filing: This is the primary fee for incorporation. It varies based on the company's authorized share capital. For most small companies with capital up to ₹15 Lakhs, there is no filing fee, but other charges still apply.
• Stamp Duty: This is the most significant variable. It is a state-levied tax on the Memorandum of Association (MoA) and Articles of Association (AoA). Stamp duty in states like Maharashtra or Delhi is different from Tamil Nadu or Karnataka, causing major price variations.
• PAN and TAN Application: A fee of approximately ₹110 is charged for issuing the company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
• Name Approval (RUN): While you can file the name within the SPICe+ form, a separate name reservation application costs ₹1,000.

B. Professional Fees

This is the fee paid to a Chartered Accountant (CA), Company Secretary (CS), or a law firm for their expertise.

• What it covers: Drafting legal documents (MoA & AoA), filing the forms correctly, providing consultation, and ensuring the process is smooth and error-free.
• Why it varies: Fees depend on the complexity of the registration, the professional's experience, and the city of operation. This fee is the primary reason for the wide cost range seen in the market.

C. Ancillary Costs

These are other necessary expenses incurred during the process.

• Digital Signature Certificate (DSC): Required for all directors/partners to sign the electronic forms. A DSC for two directors typically costs between ₹1,000 - ₹2,000.
• Registered Office Address: While not a fee, you must have proof of a registered office. If you don't own a property, costs for a rental agreement, NOC, or a virtual office service will apply.
• Miscellaneous Expenses: Small costs for notarization, printing, and courier services.

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Costs of Other Essential Registrations for Company Incorporation

Once your company is registered, you will need other licenses to operate legally. Here are the most common ones and their associated costs.

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Factors Affecting Company Registration Fees

Several factors influence the overall cost of registration:

1. Type of company: Pvt. Ltd., LLP, OPC, etc.
2. Authorised share capital: Higher capital means higher government fees.
3. State of incorporation: Stamp duty varies across states.
4. Professional help: Costs increase if you hire legal or financial consultants.
5. Compliance requirements: Annual filings, GST, and audits add to expenses.

Key Costs Involved in Company Registration

When budgeting for company registration in India, consider the following expenses:

• Office Address Proof- Home, rented, or virtual office setup costs.
• Digital Signature Certificate (DSC)
• Director Identification Number (DIN)
• Name Approval Fee
• Stamp Duty – State-dependent
• Registration Filing Fees- Depends on authorised capital.
• Professional Fees
• PAN & TAN Application
• Miscellaneous Costs- Printing, notarisation, shipping, etc.

Tips to Reduce Company Registration Costs

• Choose the right business structure: Avoid overcomplicating; pick a structure that fits your scale and goals.
• Hire affordable professionals: Compare fees before finalising consultants.
• Stay compliant: Timely filings prevent late fees and penalties.

Important update- Additional fees apply for the delay in filing forms

The MCA has tightened rules around compliance. Delayed filing of statutory forms now attracts additional fees, which can be significantly higher than the standard charges.

For example:

• Delay of up to 30 days: 2x of normal fees
• Delay of 30- 60 days: 4x of normal fees
• Delay beyond 180 days: 12x of normal fees

This makes it important for companies to track deadlines, file forms on time, and seek professional assistance when needed to avoid heavy penalties.

Frequently Asked Questions (FAQs)