Acceptance of Deposit under the Companies Act, 2013 w.e.f. 1st April, 2014
I. Meaning of the word “Deposits”
As per Section 2(31) the word Deposit has been defined as follows:
“Deposit” includes any receipt of money by way of deposit or loan or in any other form by a company
II. Meaning of the word “Depositor”
- Any member who has made a deposit with any Company other than eligible company
- Any person who has made a deposit with eligible company
III. Who is eligible to accept Deposits?
- One Person Company
- Private Limited Company
- Public Limited Company
- Eligible Public Limited Company
Net worth not less than 100 crores or a turnover of not less than 500 crores and has obtained prior consent of the Company vide Special Resolution which has been duly filed prior to making an invitation.
If accepting deposits within the limits as specified under Section 180(1)(c) Ordinary Resolution
- Government Company
- Eligible Government Company
Not applicable to:
- Banking Company
- Non-Banking Financial Company
- Any company which may be specified
IV. Sources of Deposits
- From Directors
- From Members
- From persons other than Members (Can be termed as public)
V. Limit upto which any Company (Other than eligible company) may accept Deposits:
- From Directors : No Limit
- From Members : upto 25% of Paid up
- Share Capital & Free Reserves
- From Public : NOT ALLOWED
VI. Limit upto which an eligible Public Company may accept Deposits:
- From Directors : No Limit
- From Members : upto 10% of paid up Share Capital & Free Reserves
- From other : upto 25% of Paid up Share Capital & Free Reserves
VII. Limit upto which an eligible Government Company may accept Deposits
- From Directors : No Limit
- From others : upto 35% of Paid up Share Capital & Free Reserves
VIII. categories of receipts exempted
1. Any amount received from State or Central Government authorities
2. Any amount received from outside India subject to FEMA Act.
3. Loan or facility from Bank
4. Loan received from Financial Institution
5. Any amount received against issue of Commercial Paper
6. Inter Corporate Deposits
7. Any amount received towards issue of security, share application money or advance towards allotment of securities pending allotment upto 60 days from the date of receipt
8. Any amount received from a person who has a Director of the Company subject to declaration
9. Secured Bonds or Debentures or Compulsorily Convertible Bonds or Debentures within 5 years
10. Non interest security deposit from employees not exceeding his annual salary
11. Any non-interest bearing amount received or held in trust
12. Any amount received in the course of or for the purpose of the business of the Company
- For supply or goods or service upto 365 days provide not subjudice
- As advance towards purchase of property
- Security deposit for performance of contract for supply of goods or services
- As advance for supply of capital goods subject to legally allowed
13. Any amount brought in by the promoters by way of unsecured loan in pursuance of any lending institution
IX. General Terms and Conditions of Deposit:
- Should not be repayable on demand
- Period from 6 months to 36 months
- Short Term Deposit repayable before 6 months but not earlier than 3 months upto 10% of Paid up share capital & free reserves
- In joint names not exceeding 3 persons
- May be secured or unsecured
- In case of Unsecured to be mentioned as “Unsecured”
- Rate of interest or brokerage not to exceed the maximum as prescribed by RBI
- The Company shall not have right to alter the terms and conditions alter circular or advertisement or deposit issued
X. 1) Return of Deposits
Return of Deposits in Form DPT 3 to be filed with ROC on or before 30th June of every year
2) Premature payment or late payment
For premature repayment @1% less and penal interest @15% for overdue payments
3) Status of deposits accepted before the commencement of the Act (either due or not)
- To file with ROC a statement of all the deposits (whether due or not) and arrangements made thereon – within a period of 3 months from the date of commencement or from the date on which such payment are due
- To repay within one year from the date of commencement or from the date on which such payments are due, whichever is earlier
- The Tribunal may on application allow further time as considered reasonable after considering the financial position of the Company
- The Company shall be punishable if deposit not repaid within 1 year or extended time, with afine which shall not be less than one crore rupees which may extend to Rs. 10 crores and every officer in default shall be punishable with imprisonment which may extend to 7 years or with fine not less than Rs. 25,00,000/- which may extend to Rs. 2 crores or with both
4) Relief to Depositors where deposits not paid
- Subject to the provisions as contained in Chapter V and Rules thereof, the Company may accept deposits on the terms and conditions as may be mutually agreed upon between the Company and Depositor
- Every deposit shall be repayable as per the agreement
- In case of failure, the depositor may apply to the Tribunal for an order for repayment along with any loss or damage incurred
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