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Deposits from Partnership frm

Mitali Agarwal (Company Secretary) (638 Points)

06 February 2010

Whether a public ltd. unlisted co. can accept deposits from a partnership firm (related party) in which all the partners are directors of the company?

I think the co. can not accept as a public co. can accept deposits only from directors (exemption under Rule 3(ix) of the Acceptance of deposits Rules).

Plz clarify.

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7 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 06 February 2010

Dear Mitali,

First of all public company can accept deposit from its directors, shareholders, their relatives as well as public subject to the provisions and limits specified by section 58A and Acceptance of Deposit Rules, 1975.

Secondly, Public company can accept deposit from such firm.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 06 February 2010

As per Acceptance of Deposit Rules, 1975 deposit form director of a public company shall be exempted deposit.

Mitali Agarwal (Company Secretary) (638 Points)
Replied 06 February 2010

Ya a public company can accept deposit from a firm but it will not be an exempted deposit and provisions of Rules and consequently, advertisement is required to be issued??

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 06 February 2010

Dear Mitali,

I have said deposit form Director is a exempted deposit and not from the firm.

Mitali Agarwal (Company Secretary) (638 Points)
Replied 06 February 2010

Thanks Sir.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 06 February 2010

Dear Mitali,

The requirement of advertisement can also be exempted where a company intends to accept deposits without inviting, or allowing or causing any other person to invite, such deposits. It shall before accepting deposits deliver to the Registrar for registration a Statement in Lieu of Advertisement containing all the particulars required to be included in the advertisement by virtue of sub rule (2) of rule 4 of Acceptance of Deposit Rules, 1975 duly signed in the manner provideed in sub rule (4) of that rule (i.e. duly signed by the majority of directors).