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Clause 32 of compliance certificate

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Dipjyoti Majumdar

CA in service & CS. dipmaj@

3488 Points Joined June 2011

Friends

Can any one of you analyse what is the significance of point 32 of Compliance Certificate issued by a PCS under Rule 3 of Companies (Compliance Certificate) Rules 2001.

It deals with - ' The Company has not received any money as security from its employees during the financial year'.

I mean, what would happen if a Company receives money from its employees as security. Is there any bar in company law with respect to receipt of money as security from its employees.

Regards,

Replies (1)

CS Mitesh Mehta

Company Secretary

17139 Points Joined January 2009

Section 417 of the Companies Act, makes it obligatory for every company, to deposit any money or security deposited with a company by its employee in pursuance of his contract of service with the company in the manner stipulated in Section 417(1) and prohibits the company from using such moneys or securities for purpose except for the purpose agreed to in the contracts of service.