Sec 73 of Companies Act: Prohibition on acceptance of deposits

 

Deposits are a means through which companies generally acquire funding. The provisions concerning deposits are covered under Sections 73 to 76 of the Companies Act, 2013, which are generally read with the prescribed Rules. As per the Companies Act, 2013, a deposit is any money that is received, either by means of a deposit or a loan or any other form as may be prescribed, but does not include certain classes of transactions.

List of exempted deposit:

Section 73 to 76 of the Companies Act 2013, and the companies acceptance of Deposits Rules, 2014 shall apply to all companies Excluding:-

 

Ø Banking Company

Ø Non-Banking Financial Company registered with RBI

Ø Notified company by the Central Government in consultation with the RBI.

 

Company can accept the deposits from the members as well as from public (Sec. 73 to 76)

*Conditions for Private Company:

1. Company which is not associated or subsidiary with any other company.
2. The borrowing of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or Rs. 50 cr. Whichever is less.
3. Company which has not defaulted in the repayment of such borrowing subsisting at the time of accepting deposit u/s 73.

 

**Specified IFCS Public Company:

An unlisted public company which is licensed to operate by RBI or SEBI or IRDA from the International Financial Services Centre located in an approved multi services SEZ set up under the Special economic Zones Act, 2005.

 

***Eligible Companies:

                            I.    A public company having a net worth of not less than Rs.100 Crore or

                           II.    Turnover not less than Rs. 500 Crore

 

****Other Companies:

                            I.     A public company other than

                           II.     Specified IFSC Public Company

                         III.     Eligible Company

  

ROC Forms need to be filled for Acceptance of Deposit:

DPT-1- Circular in the form of announcement inviting deposits

DPT-2- Deposit Trust Deed

DPT-3- Return of Deposits

DPT-4- Statement regarding deposits existing on the Commencement of the Act.

DISCLAIMER
The information shown in above blog/ article is from North Pole Management LLP. We believe that the information put forward are in sync with applicable laws & regulations prevailing at present. Any discrimination, if found by reader they can directly reach out to the management of the company on the email ID of contact@northpolemanagement.in
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