The Tax Publishers

Companies Act, 2013--Deposits

Acceptance of Deposits under Companies Act, 2013

CA. Deepak Harwani

In the present article the learned author discusses about the provisions with respect to accepting deposits under Companies Act, the procedure to accept such deposits along with interest rate and maximum amount upto which deposits can be accepted.

1. Introduction

Deposits is considered as one of the major sources of fund where the company accquires fund from the members and the public at large. Hence, to protect the interests of the public who have invested their savings in company, it is necessary to regulate such deposits. Therefore, deposits are regulated by sections 73 to 76A of the Companies Act 2013 and Companies (Acceptance of Deposits) Rules, 2014.

2. Applicability

Section 2 (31) of the Act 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 state that every public company accepting deposits from public should have -

Turnover of atleast Rs. 500 crore, or

Net worth of atleast Rs. 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 and Housing Finance company

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

3. Provisions for Acceptance of deposits

Resolution-Company accepting deposits from public should pass special resolution and file a copy of such resolution with Registrar of Companies. However, if such deposits are accepted from members only, then general resolution will be sufficient.

Credit Rating-Company accepting deposits from public should obtain credit rating from a recognised credit rating agency every year and file a copy with Registrar along with return in form DPT-3.Such rating shall not be below the minimum investment grade rating for fixed deposits.