Hi All,
one of my company is into hospitlity (Health Resorts) and has accepted membership deposits in the year 2005. In the year 2005 BS it ws treated as long term liabilty by the auditor and from 2006 onwards he transferred the same into current liability.
Now my question is will this DEPOSIT will cum under the preview of sec 58A or ne exemption. Also till date company hs nt refunded the said amount.
I feel that by your descripttion, Membership deposits accepted fall into one of the category of exclusions specified in section 2 (b) of Companies acceptance of deposit rules 1975. Hence they donot come under the purview of Section 58A of companies Act.
Only my view. Expert opinions are welcome.
With best wishes for all of your future endeavours
Dear neetu, whether deposit amount is requested publicly or it is privately acquired through kith n kin ones...?
its thru privte n public both....
What is the mode of requistion of deposit from public...? Via public advertisement or any other mode......?
If it's a private company, acceptance of deposit from members would fall under exclusions specified in Section 2(b)(ix) of the Companies Acceptance of Deposit Rules, 1975. Hence it would not attract the provisions of Section 58A of the Companies Act, 1956.
However in case of a public company, the deposits from members would attract the provisions of Section 58A.
Also Clarify,
cn the amount in Current liabilty stand for a period of 5 yrs... INTACT.
CAclubindia
