Security deposit by private company
This query is : Resolved
SAPNA KANNAIDAS
(Querist)
12 December 2014
Dear friends,
A private company takes trade security deposits from its purchasers which is not covered under section 73 to 76 of the Companies Act, 2013 and exempted under Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014. For the said deposits, it issues Business Deposit Receipts and also pays interest. What specific terms and conditions regarding the exemption can be included in the security deposit receipt so that it is not interpreted as a Deposit under Section 73 to 76 of the Companies Act, 2013.
Thanks and regards,
Sapna Kannaidas
A private company takes trade security deposits from its purchasers which is not covered under section 73 to 76 of the Companies Act, 2013 and exempted under Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014. For the said deposits, it issues Business Deposit Receipts and also pays interest. What specific terms and conditions regarding the exemption can be included in the security deposit receipt so that it is not interpreted as a Deposit under Section 73 to 76 of the Companies Act, 2013.
Thanks and regards,
Sapna Kannaidas
Amol S Joglekar
(Expert)
12 December 2014
The more you try to prove that it is security deposit, more you will land into troubles. Just issue money receipt, nothing more.
(By the way, is it customary in your trade to accept SECURITY deposit?)
(By the way, is it customary in your trade to accept SECURITY deposit?)
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