Dear Manisha,
please find the relevant notification which related to sec. 58A(7) (a) (ii)
But you have to say to your firm with you are associate, when you people doing such in-depth analysis on any subject matter then its required to have ramaiya sort of books.
In normal course, for raising deposits from public, a business enterprise, which is incorporated as public limited or private limited company, is required to make advertisement under the Section 58A of the Companies Act, 1956. But this requirement is not applicable to small-scale industrial units which fulfill the following conditions laid down by the Department of Company Affairs and vide notification No GSR 73(E), dated 2-2-1996, ie where (a) The paid-up capital of the company does not exceed Rs 25 lakh; (b) the company accepts deposits from not more than 100 persons; (c) their is no invitation to public for deposits; and (d) the amount of deposits accepted by the company does not exceed Rs 20 lakh or the amount of its paid-up capital, whichever is less.
For the purpose of this notification— (i) deposit has the same meaning in clause 9b0 of rule 2 of the Companies (Acceptance of Deposits) Rules, 1975, i.e. the deposit shall include any deposit of money with an include any amount borrowed not including amount received from the Central or the state government in any form or loan form banks or financial institutions from another company, employees of the company, security deposits, advance money from agents, promoters of the company, money raised through bonds or debentures.
(ii) A small-scale industrial unit means any industrial undertaking registered with the Directorate of Industries of Small Scale Industries, as the case may be, of the State Government and in respect of which the investment in plant and machinery is not in excess of Rs 60 lakh in value.
The investment limit of SSI has been raised to Rs 3 crore. Hence the stipulation of paid-up capital of the company will also have to change. The deposit by SSI can be raised only up to the extent of paid-up capital.
Deposits raised by SSI organised as limited companies are to be regulated under the Companies (Acceptance of Deposit) Rules, 1975.
These rules require a company to make advertisement in a newspaper to raise deposits in the prescribed application form, issue requisite receipts to depositors, maintain a register of deposits, and adhere to the provisions regarding the repayment of deposit.
Such companies are also required to maintain 15 per cent of the deposit amount as liquid assets in term of Rule 3A of the aforesaid Rules, 1975.
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with warm regards,
Aman Kumar Jain
LL.B., M.Com, ACS
AMAN JAIN & ASSOCIATES,
COMPANY SECRETARIES
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LAJPAT NAGAR-I,
NEW DELHI-110024
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