Deposits are a means through which companies generally acquire funding. When the Directors are not in the verge to dilute their stake, they may opt for deposits from public at large. Section 73 to 76 of the Companies Act 2013 read with Rules made under Chapter V of the Companies Act, 2013 regulate the invitation and acceptance of deposits.
As companies Act 2013, “deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include such categories of amount as may be prescribed under Rule 2(c) of the Companies (Acceptance of Deposit) Rules, 2014.
They include Any amount,
Companies may accept deposits from both, members and the general public as per the provisions of the Companies Act, 2013. Provisions of Section 73-76 of the Companies Act, 2013 shall not apply to :-
1. Banking Company
2. Non-Banking Financial Company as per RBI Act 1934
3. Any other company notified by the Central Government in consultation with the RBI.
Acceptance of Deposits by Private Companies
The Companies Act, 2013 prohibits private limited Companies to accept deposits from public at large. But the Private Company can accept deposits from its Directors, Members and relatives of Directors after fulfilling the conditions as prescribed in the deposit rules.
The Companies (Acceptance of Deposit Rules) states that:-
No company referred to in sub-section (2) of section 73 shall accept or renew any deposit from its members, if the amount of such deposits together with the amount of other deposits outstanding as on the date of acceptance or renewal of such deposits exceeds thirty five per cent of the aggregate of the Paid-up share capital, free Reserves and securities premium account of the company
Provided further that the maximum limit in respect of deposits to be accepted from members shall not apply to following classes of private companies, namely:-
(i) a private company which is a start-up, for ten years from the date of its incorporation;
(ii) a private company which fulfils all of the following conditions, namely:-
(a) which is not an associate or a subsidiary company of any other company;
(b) the borrowings of such a company from banks or financial institutions or anybody corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is less ; and
(c) such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under section 73:
Provided also that all the companies accepting deposits shall file the details of monies so accepted to the Registrar in Form DPT-3.]
Filing of Form DPT-3
Every Company (Whether, Small, Non Small, Private, Public, OPC etc.) to which deposit rules apply, shall on or before the 30th day of June, of every year, file with the Registrar, a return in Form DPT-3 mentioning the details of deposit.
As mentioned above, the private companies who have accepted monies which are not considered as deposits shall be required to file “Particulars of the transactions not considered as deposit” as per the Companies Act, 2013 and rules made thereunder in Form DPT-3.
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Disclaimer: This article is written merely for informational purposes and it should not be taken as a legal advice. The readers are advised to consult competent professionals before acting on the basis of any information provided here.