Deposits

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Rajiv Kaicker (Querist)
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11 June 2010 Can a Private Company invite deposits?If yes,what is the procedure to be followed and what are the limits?

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Rajiv Kaicker

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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11 June 2010 Private Limited company is prohibited from inviting any invitation or acceptance of deposits from persons other than its members, directors or their relatives.

Rajiv Kaicker

Rajiv Kaicker (Querist)
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11 June 2010 Okay.But what procedure is required for this purpose?Also,in such cases ,the limit in terms of Paid up capital and free reserves shoulnot apply?Pls confirm.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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11 June 2010 Pl see section 3(1)(iii)(d) of the Companies Act,1956 which is self explanatory so as to clear your doubt.

Rajiv Kaicker

Rajiv Kaicker (Querist)
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11 June 2010 What are the steps to be followed such as satement in lieu of advertisement,etc,? And is the limit 35% of the paid up capital and free reserves?