Acceptance of deposits from directors as per ca,2013

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This query is : Resolved

CA Sanjay Baheti (Querist)

12 May 2015 In case of Pvt Ltd Co Acceptance of deposits from Directors are not covered within definition of term Deposit by virtue of section 73 of CA,2013.Hence a company can take/accept loan/deposit from directors during year under audit without complying the Deposit Acceptance rules.However a written declaration in prescribed format has to be obtained from director each time as and when deposits accepted from directors during year under consideration.

Now query is

i) whether this is correct i.e. each time a written declaration has to obtained from director as and when deposits accepted during year or one declaration for entire year is to be taken.

ii) if any there is prescribed format of such written Declaration. if yes then send to me at email id bahetisanjay.2009@rediffmail.com.

Vishrut Shah

Vishrut Shah (Expert)

12 May 2015 1. Single declaration will serve the purpose and no individual declaration required every time you take a loan.

2. It is just a single page declaration about the money advanced to company along with declaration of cost of funds and confirmation that it is not advanced out of any borrowed fund by directors in personal capacity which is prohibited under companies Act,2013.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

12 May 2015 1) The words used in the rules is "at the time of giving money" which means declaration should be given each time.

2) No format is prescribed in the rules for the declaration.

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