If we carefully look into the provision of section 3(1)(iii) than we find that this section put four restrictions on a Private Limited Company, inter alia provide that a Private Limited Company shall not invite or accept any public deposits from person other than its members, Directors or their relatives.
That is a private limited company can accept deposits from its Members, Directors or their relatives, in audit one should check that whether a private limited Company accepted or invited deposits from the persons other than permitted person.
Now question arises that what is deposits:-
Subjects to 11 exclusions as given in Rule 2(b) of Companies (Acceptance and Invitation) Rules 1975, Deposits any deposits of money with, and includes any types of borrowings by the Company.
Rule 2(c) provides a depositor means any person who has given loan to the company.
That is definition of deposits is very browed.
In the light of above mention rules we can say if loan accepted by the Company is properly shown in the balance sheet as secured or unsecured loan as the case may be and books of accounts properly showing the rate of interest than it will be loan and not deposits.
In this regard I heard a discussion of Dy. ROC of Delhi with Vice Chairman of ICSI-NIRC, he was suggesting that if a private limited company accepting application money and keeping in balance sheet for a unreasonable time without allotting shares in this regard, than it can be treated as deposits, and that will amount to violation of 3(1) (iii).
As far as applicability of section 58A is concerned than it is not applicable to all companies other than none banking financial institution or other company as specified by the Central Government
It may be noted that deposits are always unsecured borrowings
Section 299 is talking about discloser of interest by the director of the company who is interested in transactions or contract; this is applicable to both private as well as public company.
Section 301 is talking about Register of contracts, companies and firms, in which directors are interested,
This registered is required to maintain by both private and public companies.