Acceptance of Deposits by Company by Samidha Hegde@Lexcliq

Introduction

Every Company in India need to comply with the Companies Act, 2013 (hereinafter called “the Act”) to do any activity, whether it is to Appoint a Director or to fulfil the need of Capital, in the same scenario whenever a Company need to raise Deposits the Company need to Comply with the Chapter V Acceptance of Deposit by Companies containing Section 73 to 76A read with The Companies (Acceptance of Deposit) Rules, 2014 (hereinafter called “ Rules”).

 

The procedure to accept deposits from members can be summarised as under:-

  1. The companies intending to invite deposits from its members shall convene a Board meeting to consider and approve the business to propose and accept deposits from members and decide the day, date, time and place of the general meeting.
  2. Issue notice of general meeting to the members of the company.
  3. Hold the general meeting and pass resolution for acceptance of deposits.
  4. Comply with the Rules prescribed in consultation with RBI and terms and conditions mutually agreed by the company and deposit holders either for acceptance or for repayment of deposits.

*5. Issue circular to the members of the company including therein a statement showing the financial position of the company, the total number of depositors and the amount due towards depositors in respect of any previous deposits and such other particulars as may be prescribed. These details indicate the soundness of the company or a warning about risks involved. The circular shall be published at least once in English language in a leading English newspaper and in vernacular language in a vernacular newspaper having wide circulation in the State in which the registered office of the company is situated.

*6. File the copy of aforesaid circular in the Form DPT-1 along with such statement with the Registrar within thirty days before the date of issue of circular.

  1. In case, a company does not secure the deposits or secures such deposit partially, then, the deposits shall be termed as “unsecured deposits” and shall be so quoted in every circular, form, advertisement or in any document related to invitation or acceptance of deposits.

*8. A company inviting secured deposits shall provide for security by way of a charge on its assets for the due repayment of the amount of deposit and interest thereon. The company shall submit Form CHG-1 with Registrar for assets other than intangible assets and of the amount of deposit and interest thereon. Secured deposits including interest thereon can in no case exceed the market value of the charged assets assessed by the registered valuer.

*9. After the expiry of 30 days of filing Form DPT-1, the circular in Form DPT-1 along with application form is sent to all members by registered post with acknowledgement due/speed post/electronic mail.

  1. Collect duly signed application form along with money from the members.
  2. Issue receipts of deposits within 21 days of the receipts of money/realisation of cheque.
  3. Maintain register of deposits at its registered office which shall contain the details as prescribed under rule 14 Companies (Acceptance of Deposits) Rules, 2014 from the date of such acceptance.
  4. Pay interest as per the rate proposed on agreed terms.

*14. Deposit such sum which shall not be less than fifteen percent of the amount of its deposits maturing during the financial year and the financial year next following and keeping it in a separate bank account called deposit repayment reserve account.

  1. Submit return of deposits in Form DPT-3 on or before 30th June each year for information as on 31st March of respective year.

 

References-

https://www.jkgupta.com/acceptance-of-deposit-by-companies/

https://taxguru.in/company-law/acceptance-deposits-companies-members.html

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