For incorporation of Nidhi Company under the Companies Act, it has to fulfil the following conditions:
- It must be incorporated as a public company.
- It must have a minimum paid up equity share capital of five lakh rupees.
- It can have minimum 3 and maximum 15 directors.
- It must compulsorily have its object in its Memorandum of Association as the “object of cultivating the habit of thrift and savings amongst its member, receiving deposits from, and lending to, its members only, for their mutual benefit.”
- It is mandatory for the company to have the suffix “Nidhi Ltd.” as part of its name.
- It must have not less than 200 members at any point of time of the existence of the company after its incorporation under Rule 5 of Nidhi Rules, 2014.
- It must, have Net Owned Funds of ten lakh rupees or more and the ratio of the net owned funds to deposits should not be more than 1:20.