Accepting deposits is a common way for companies to raise funds. However, under the Companies Act, 2013, the acceptance of deposits is tightly regulated to protect investors and ensure transparency.
This blog explains what qualifies as a deposit, who can accept it, who cannot, exemption s, reporting requirements, and penalties.
What is a Deposit?
A deposit means any money received by a company, whether in the form of a loan or otherwise, excluding certain specified categories.
The Companies (Acceptance of Deposits) Rules, 2014 define what is and isn’t a deposit.
Types of Companies & Who Can Accept Deposits
| Company Type | From Public | From Members |
| Public Company (Eligible) | Yes, up to 25% of paid-up capital + free reserves + securities premium | Yes, up to 10% |
| Public Company (Non-Eligible) | No | Yes, up to 35% |
| Private Company | No | Yes, up to 100% (of paid-up share capital + free reserves + securities premium) |
| IFSC Public Company | No | Yes, up to 100% (under special notification) |
Exempted Categories (Not Treated as Deposits)
Certain amounts are not treated as deposits, if specific conditions are met:
1.Loan from Directors
- Director must be on board at time of giving loan.
- Declaration required: money is from own funds (not borrowed).
- Applicable to public and private companies.
2. Loan from Relatives of Directors
- Allowed only in private companies.
- Same own fund declaration required.
3. Promoters’ Unsecured Loans
- Only if mandated by bank or institution to bring in promoters’ contribution.
- Only from promoter/their relatives.
- Valid till bank loan is outstanding.
4. Inter-Corporate Loans
- Loan from one company to another is not a deposit.
5. Amount Received Against Supply of Goods or Services
- If adjusted within 365 days.
6. Advance for Property, Goods, or Services
- If utilized within prescribed time.
7. Share Application Money
- Not refunded beyond 60 days → treated as deposit.
Key Compliance for Accepting Deposits
Filing with ROC:
- Form DPT-3: Must be filed annually for deposits and exempted deposits.
Deposit Repayment Reserve:
- Minimum 20% of deposits maturing during the next financial year to be kept in separate bank account.
Credit Rating:
- Companies accepting public deposits must obtain credit rating every year and file it with ROC.
Penalty for Non-Compliance (Sec 76A)
- Company: Minimum ₹1 crore or twice the amount of deposit, up to ₹10 crore.
- Officers in default: Up to 7 years’ imprisonment, and fine of ₹25 lakh to ₹2 crore.
- If done knowingly, fraud charges can be added.
Special Provisions for Startups and Private Companies
Private companies not being a subsidiary/associate and having low bank borrowings (less than ₹50 Cr or twice capital) can accept deposits without limit from members.
Startups can accept any amount from members for first 5 years.
IFSC Public Companies
IFSC (International Financial Services Centre) public companies are now treated like private companies for deposit rules. They can accept deposits up to 100% of capital + reserves from members.
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