“Nidhi” is a Hindi word, which means finance or fund. Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.

Key Features of Nidhi Company are:

  • A Nidhi Company must have a minimum of 200 shareholders.
  • A Nidhi company must have unencumbered term deposits of not less than 10% of the outstanding deposits.
  • A Nidhi must have net owned funds of ten lakh rupees or more.
  • Minimum 7 Shareholders and 3 Directors are required to incorporate the Nidhi Company.
  • Nidhis can issue only rights shares and unsubscribed portion of rights issue can be apportioned by the Board of Directors as per the existing law.
  • Nidhi members should not exercise over and above 10% of the total voting rights of all shareholders.
  • A Nidhi Company must ensure that the number of membership should feature a minimum of 200 shareholders.
  • Nidhi Investments for minors can only be done where the legal guardian is a member of the Nidhi.
  • Every Nidhi Company shall issue the equity shares of a minimum value of Rs10.
  • The Nidhi Company should not be allowed to issue any new preference shares at any time.