“Explore the comprehensive guide on the definition of deposit under the Companies Act, 2013. Learn what constitutes a deposit and exceptions outlined by the Reserve Bank of India. Understand the prohibition on accepting deposits from the public, the process of return filing, maintenance of deposit registers, and the penalties for contravention. Stay informed on the intricacies of deposit regulations to ensure compliance with the Companies Act, 2013.”
Definition of Deposit and what does not include in deposit:
As per section 2(31) and rule ‘deposit’ includes any receipt of money by way of deposit or loan or in any other form by a company, but following loan does not include in deposit as mentioned by the Reserve Bank of India:
-any amount received from central or state government directly or indirectly.
– any amount received from foreign government or multinational foreign institutional or any other Multinational bank or foreign citizen or foreign collaboration or by any other source from foreign.
– any amount in the form of loan or financial assistance or credit limit from any bank or state government or any subsidiary company or bank of state government or central government or from public financial institution.
– any amount received in the form of commercial paper or in the form of any other instrument as per the guidelines issued by Reserve Bank of India
– any amount received by a company from any other company (Inter Corporate Loan).
– any amount received in the form of application money or subscription money against any security equity of debenture or in any other form of security received according to offer letter or received in advance.
Provided that the allotment of security with sixty days from the date of receipt of such amount as mentioned in section 42 or section 62 as per Companies Act 2013 or if the securities is not allotted within time, then the amount is not refund with in 15 days from the expiry of sixty days shall be treated as a public deposit.
Any adjustment of such amount shall not be treated as a refund.
- Any amount received from director or relative of director at the time of receipt of money.
Provided that at the time of receipt of money, the Director or relative of director need to give declaration that the amount is not borrowed money, the amount is out of owned fund.
- any amount raised by the issue of bonds or debentures secured by a first charge or a charge ranking pari passu with the first charge.
– any amount received through issue of Bond or debenture by a first charge on any assets referred in schedule III
Provided that if such bonds or debentures are secured by the charge of any assets referred to in Schedule III of the Act, excluding intangible assets, the amount of such bonds or debentures shall not exceed the market value of such assets as assessed by a registered valuer;
– any amount received by issue of non-convertible debenture not constituting a charge on the assets of the company and listed on a recognised stock exchange as per applicable regulations made by Securities and Exchange Board of India.
- any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of non-interest-bearing security deposit; any non-interest-bearing amount received and held in trust.
– any amount received in the course of, or for the purposes of, the business of the Company.
(a) as an advance on behalf of supply of goods or provision of services.
Provided that in case of any advance which is subject matter of any legal proceedings before any court of law, the said time limit of three hundred and sixty-five days shall not apply:
(c) as security deposit for the performance of the contract for supply of goods or provision of services.
(d) as advance received under long term projects for supply of capital goods except those covered under item (b) above:
(e) as an advance towards consideration for providing future services as mentioned in the agreement
(f) as an advance received and as allowed by any sectoral regulator or as per instruction by state or central government
(g) as an advance for subscription towards publication, whether in print or in electronic to be adjusted against receipt of such publications
– any amount received by way of subscription in respect of a chit under the Chit Fund Act, 1982 (40 of 1982);
– any amount received by the company under any collective investment scheme in compliance with regulations framed by the Securities and Exchange Board of India;
– an amount of twenty-five lakh rupees or more received by a start-up company, by way of a convertible note (convertible into equity shares or repayable within a period not exceeding ten years (from the date of issue) in a single tranche, from a person.
– any amount received in company from Alternate Investment Funds, Domestic Venture Capital Funds, and Mutual Funds registered with the Securities and Exchange Board of India in accordance with regulations made by it.”
Prohibition on acceptance of deposit from Public:
7. (1) on and after the commencement of this Act, no company shall invite, accept or renew deposits under this Act from the public except in a manner provided under this Chapter:
Provided section 73 is not applicable on following company:
– banking company.
– non-banking financial company.
– company related to central government
(2) A company may, subject to the passing of a resolution in general meeting.
(a) issuance of a circular to its members including therein a statement showing the financial position of the company with the following details:
-the credit rating obtained, the total number of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company and such other particulars in such form and in such manner as may be prescribed;
(b) filing a copy of the circular along with such statement with the Registrar within thirty days before the date of issue of the circular;
(c) depositing, on or before the thirtieth day of April each year, such sum which shall not be less than twenty percent of the amount of its deposits maturing during the following financial year and kept in a scheduled bank in a separate bank account to be called deposit repayment reserve account;
(d) certifying that the company has not committed any default in the repayment of deposits accepted either before or after the commencement of this Act.
(e) providing security, if any for the due repayment of the amount of deposit or the interest thereon including the creation of such charge on the property or assets of the company:
What happen if any Company accept deposit:
Every deposit accepted by a company under sub-section (2) shall be repaid with interest in accordance with the terms and conditions of the agreement referred to in that sub-section.
What happen if any company fail to repay deposit:
Where a company fails to repay the deposit or part thereof or any interest thereon under sub-section (3), the depositor concerned may apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred by him as a result of such non-payment and for such other orders as the Tribunal may deem fit.
– The deposit repayment reserve account referred to in clause (c) of sub-section (2) shall not be used by the company for any purpose other than repayment of deposits.
Return of Deposits to be Filed with the Registrar:
Every Company to which these rules apply, shall on or before the 30th day of June, of every year, file with the Registrar, a return in Form DPT-3 along with the fee as provided in Companies (Registration Offices and Fees) Rules, 2014 and furnish the information contained therein as on the 31st day of March of that year duly audited by the auditor of the company.
Further, Form DPT-3 shall be used for filing return of deposit or particulars of transaction not considered as deposit or both by every company other than Government company.
Register of Deposits:
(1) Every company accepting deposits shall maintain at its registered office one or more separate registers for deposits accepted or renewed, in which there shall be entered separately in the case of each depositor
Penalty provision:
What happen if any company do contravention of the provision of Section 73 of the Companies Act 2013:
The company and every officer of the company who is in default shall be punishable with fine which may extend to five thousand rupees and where the contravention is a continuing one, with a further fine which may extend to five hundred rupees for every day after the first day during which the contravention continues.
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