Companies Act, 2013--Deposits

Deposits Under Companies Act, 2013

Deepak Harwani

Deposits is considered as one of the major source of fund from where the company can acquire funds from the members and the public at large. In order to protect the interests of the public which invested their savings in company it is necessary to regulate such deposits. Therefore, company deposits are regulated by section 73 to 76 A of the companies act 2013 and Companies (Acceptance of deposits) Rules 2014.The Learned Author in this Article provides an overview of Deposits under Companies Act, 2013.

1. Applicability

Section 2 (31) defines deposits as 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 in consultation with the RBI.

Section 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 states that every public company accepting deposits from public should have -

-- Turnover of atleast 500 crore, or

-- Net worth of atleast 100 crore

Company accepting or renewing deposits from public is required to follow Chapter V which contains provisions regarding acceptance of deposits by companies. However the following companies are exempted from such requirements-

-- Banking company

-- NBFC & Housing finance company

Such other company as the Central Government, post consultation with RBI may define.

2. Amounts not considered as deposits

(i) Amount received or guaranteed by Central Government/State Government/local authority/Statutory authority constituted under an Act of Parliament or a State Legislature.

(ii) Amount received from Foreign Governments/Foreign or international banks, multilateral financial institutions.