Nidhi Company in India



  • A Nidhi shall not declare dividend exceeding 25%or
  • Such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing and further subject to the following conditions-
  • An equal amount is transferred to General Reserve;
  • There has been no default in repayment of matured deposits and interest; and
  • It has completed with all the rules as applicable to Nidhis.



  • The director shall be a MEMBER of Nidhi.
  • He shall hold office for a term up to 10 consecutive years on the Board.
  • He shall be eligible for re-appointment only after the expiration of 2 years ceasing to be a director.
  • Where the tenure of any director in any case had already been extended by the Central Government it shall terminate on expiry of such extended tenure.
  • The person to be appointed as a Director shall comply with the requirements of Section 152(4) of the Act and shall not have been disqualified as provided in Section 164 of the Act.



  • The tenure of Auditor is five consecutive years.
  • No auditor or audit firm as auditor shall be appointed for more than two terms of five consecutive years.
  • The auditor shall be eligible for subsequent appointment after the expiration of two yearsfrom the completion of his term.
  • The Auditor of the company shall furnish a Certificate every year to the effect that the company has complied with all the provision contained in the rules and such certificates shall be annexed to the audit report and in case of non-compliance he shall specifically state the rules which have not been complied with.



  • A Nidhi may open branches only if it has earned net profits after tax continuously during the preceding three financial years.
  • The company may open up to 3 branches only within the district.
  • If it proposes to open more than 3 branches within the district or any branch outside the district, it shall obtain prior permission of the Regional Directorand intimation is to be given to the Registrar about opening of every branch within 30 days of such opening.
  • No Nidhi shall open branches or collection centers or offices or deposit centers, or by whatever name called outside the State where its registered office is situated.
  • Further branches or collection centers or offices or deposit centers shall be opened unless financial statement and annual return are filed with the Registrar.


Close of Branch:

A Nidhi shall not close any branch unless:

  • It publishes an advertisement in a newspaper in vernacular language in the place where it carries on business at least 30 days prior to such closure.
  • Informing the public about such closure; fixes a copy of such advertisement or a notice informing such closure of the branch on the notice board of Nidhi for a period of at least 30 days from the date on which advertisement was published and
  • Gives intimation to the Registrar within 30 days of such closure.



? Within 90 days from the closure of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH – 1 along with such fee as prescribed with the Registrar duly certified by a Company Secretary in practice or a Chartered Accountant in practice or a Cost Accountant in practice.

? If the company is not complying with the above it shall within 90days from the close of the first financial year, apply to the Regional Director in Form NDH -2 along with fee for extension of time and

? The Regional Director may consider the application and pass orders within 30 days of the receipt of the application.

If there is failure the Nidhi shall not accept any further deposits from the commencement of the second financial year till it complies with the provisions besides being liable for penal consequences provided in the Act.


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