Ipcc company law :- diff. btwn public deposits and debenture

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Desai Makarand M. (Querist)

02 January 2015 Can anyone pls clear me what is the actual difference between Public Deposits and Debenture in case of Company ???

vignesh

vignesh (Expert)

02 January 2015 The person making the deposit has no right to call back the deposit;
The deposit does not become a debt until the period for which the
money is deposited expires and
As a consequence the creditor has no right to recover the money before
the deposit period concludes.
After considering the above facts we can distinguish loan from the
deposit as:
The person lending the loan can demand the same at any time.
The amount of loan is treated as a liability from the time it is
accepted.
Lender can recover the money of loan without expiry of any
specified period as in case of deposit.
Clause 2 (31) in companies bill: “deposit” includes any receipt of money by way of deposit
or loan or in any other form by a company, but does not include such
categories of amount as may be prescribed in consultation with the
Reserve Bank of India;
Hence under the Companies Bill, the term specifically includes the
“loan” hence clarifying the earlier confusions between the two terms

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