Deposit Under Companies Act, 2013
What can be regarded as Deposit?
Under the provisions of Companies Act,
2013 read with Companies (Acceptance of Deposits) Act, 2014, Deposit includes any
receipt of money by way of deposit or loan or in any other form by a company,
but does not include:
- Amount
received from the Central Government, State Government, Local Authority or
Statutory Authority constituted under an Act of Parliament or a state
Legislature;
- Any
amount received from any other source whose repayment is guaranteed by the
Central Government or a State Government
- Any amount received from Foreign
Government, foreign or international banks, multilateral financial
institutions, foreign export credit agencies, foreign collaborators, foreign
bodies corporate and foreign citizens, foreign authorities or persons resident
outside India subject to the provisions of Foreign Exchange Management Act
(FEMA).
- Any
amount received as a loan or facility from banking Company, SBI,
Co-operative Banks, etc notified by Central Government as per RBI Act
- Any
amount received as loan or financial assistance from Public Financial Institutions,
Regional Financial Institutions, Insurance Companies or Scheduled Banks
- Any
amount received against Commercial Papers, etc.
- Any
amount received by a Company from any other company
- Any
amount received pursuant to an offer towards subscription to any securities,
including share application money or advance, pending allotment
Exception:
a) If securities
are not allotted within 60 days from the date of receipt of the
application money or advance and
such amount is not
refunded to the subscribers within 15 days from the date of completion
of 60 days, such amount shall be treated as a deposit.
- Any
share application money is pending allotment prior to 1st April 2014
is also pending as on 31st March 2015, then it was to be refunded by
1st June 2015.
b) Amount
is required to be actually refunded as any adjustment of the amount for any
other purpose shall not be treated as refund
9.
Any
amount received from directors of the company or any of their relatives
A declaration
in writing should be submitted to company regarding amount is deposited with company
out of his own funds.
10. Bonds
/ debenture secured by first charge on any assets excluding intangible assets or
convertible into shares within 10 years (5 years before 29.06.2016)
11. Any amount raised by issue of non-convertible
debentures listed on a recognised stock exchange
12. Any amount received from employee under
a contract of employment not exceeding his annual salary and the amount should
be interest free security deposit
13. Any non-interest bearing amount received
and held in Trust
14. Any amount received in the course of or
for the purposes of the business of, the business of the company:
a.
For
supply of goods or provision of services provided that such advance is
appropriated against supply of goods or provision of services within a period
of 365 days.
b.
As
advance in connection with consideration for an immovable property under an
agreement, whereas such advance is adjusted as per terms of agreement or
arrangement.
c.
As Security
deposit for performance of contract for supply of goods or provision of
services
d.
Advance
under long term projects for supply of capital goods (excluding immovable
property)
e.
Advance
for warranty or maintenance (AMC) as per written contract for period prevalent
as per common business practice but not exceeding 5 years (inserted w.e.f. 29th
June 2016)
f.
Advance
received and as allowed by any sectoral regulator or in accordance with directions
of Central or State Government (inserted w.e.f. 29th June 2016)
g.
Advance
for subscription towards publication (in print or electronic) to be adjusted against
receipt of such publications
Note :
i) Point No. e, f and g
was inserted w.e.f. 29th June 2016
ii) If the amount
received in point no. a, b and d above become refundable due to reason that the
company does not have necessary permission or approval to deal in goods or
properties or services, then amount received shall be deemed to be deposits on
the expiry of 15 days from the date they become due for refund.
15. Any amount brought in by the promoters
of the company by way of unsecured loan due to conditions imposed by lending
financial institution or bank where
Ø
The
loan is brought in due to condition imposed by lending FI or bank
Ø
Loan
is brought in by promoters or their relatives or both AND
Ø
Exemption
is available till the time amount is repaid to FI or bank
16. Any amount accepted by a Nidhi Company
in accordance with rules made under section 406
17. Any amount received by way of
subscription in respect of Chit under the Chit Fund Act, 1982
18. Any amount received by the company under
any collective investment scheme under rules framed under SEBI regulations
19. An amount of 25 lakhs or more received
by a start up company by way of convertible note in a single tranche from a
person
20. Any amount received by a company from Alternate
Investment Funds, Domestic Venture Capital Funds, Infrastructure
Investment Trusts and Mutual Funds registered with SEBI in
accordance with regulations made by it.
Deposits from Members
A
Company may accept deposit from its members after passing resolution
in general meeting under section 73(2) of the Companies Act, 2013 read with
Companies (Acceptance of Deposits) Rules, 2014
W.e.f. 19th Sepember 2017 after amendment brought in by Companies
(Acceptance of Deposits) Amendment Rules 2017,
Maximum Limit of Deposit can be accepted
in case of Private Companies:
|
Start up Companies
|
Other Than Start Up
Companies
|
|
Without any limit
|
Without any limit
|
With limit
|
|
ØFor 5 Years from the date of
Incorporation
|
If all the below 3 conditions have
complied:
Ø
Not
an Associate or Subsidiary Company
Ø
Borrowing
from Banks/FIs
<
200% of Paid up capital (maxm
upto 50 Crores)
Ø
Has
not defaulted in repayment of such borrowing
|
Upto 100 % of aggregate of
Paid up Capital
+
Free Reserves
+
Securities Premiums
|
Maximum Limit of Deposit can be accepted
in case of Public Companies:
|
Specified IFSC Companies
(Unlisted Public Companies licensed to operate by
RBI/SEBI/IRDA from International Financial Services Centre located in Multi
Services SEZ)
|
Eligible Companies
(Public Company with
Net worth >= Rs. 100
Crores or Turnover >= Rs. 500Crores)
|
Other Public Companies
|
|
With limit
|
With limit
|
With limit
|
|
Upto 100 % of aggregate of
Paid up Capital
+
Free Reserves
+
Securities Premiums
|
Upto 10% of aggregate of
Paid up Capital
+
Free Reserves
+
Securities Premiums
|
Upto 35 % of aggregate of
Paid up Capital
+
Free Reserves
+
Securities Premiums
|
All the companies accepting deposits have
to file annual return of deposits in Form DPT-3 by June 30 in the next
financial year.
Deposits from Directors
Any amount received from a person who is
director of company at the time of receipt of money is not a deposit under Companies
Act, 2013.
However, a declaration in writing that
the amount is not being given out of funds acquired by him by borrowing or
accepting loans or deposits from others.
Moreover, w.e.f. 15th
September 2015, the company shall disclose the details of money so accepted in
the Director’s Report
Furthermore, w.e.f. 29th June
2016, the company shall disclose in its financial statements, by way of
notes (Notes to Accounts), about the money received from the directors.
Deposits from Relatives of Directors of a
Private Company
After the amendment brought into Deposit
Rules by Companies (Acceptance of Deposits) Second Amendments Rules, 2015 i.e.
w.e.f. 15th September 2015, any amount received from a relative of a
person who is director of a private company at the time of receipt of money is
not a deposit under Companies Act, 2013.
However, a declaration in writing that
the amount is not being given out of funds acquired by such relative by
borrowing or accepting loans or deposits from others.
Moreover, w.e.f. 15th
September 2015, the company shall disclose the details of money received from
such relatives accepted in the Director’s Report
Furthermore, w.e.f. 29th June
2016, the company shall disclose in its financial statements, by way of
notes (Notes to Accounts), about the money received from the relatives of directors
of a private company.
Deposits from Public
Following companies can invite deposits
from Public:
ØBanking Company as defined in the
Reserve Bank of India (“RBI”)
ØNon-banking Financial Company as defined
in the RBI
ØOther Company as specified by Central
Government after consultation with RBI
ØEligible Company being Public Company
having:
a)
Net
worth not less than Rs. 100 Crores or
b)
Turnover
not ness than Rs. 500 Crores
Requirement for compliance of Provisions
related to Deposits from Public by Eligible Companies
a)
Prior
Consent by way of Passing of special resolution
b)
Obtain
credit rating from recognised credit rating agency every year during the tenure
of deposits and shall file a copy of rating with Registrar of Companies alongwith
return of deposits in Form DPT-3.
c)
Credit
rating shall not be below the minimum investment grade rating or other
specified credit rating for fixed deposits from any one of the approved credit
rating agencies as specified for NBFCs in Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 1998 issued by RBI.
d)
The
company shall issue a circular in the form of an advertisement in form DPT-1:
For the
purpose of English Language: In English Newspaper having country wide circulation
AND
For the
purpose of vernacular language: In vernacular language having wide circulation
in the state in which registered office is situated AND
On the
website of the company, if any
e)
Such
circular shall be issued under the authority of Board of Directors only
f)
Application
form for deposit should be submitted by Intended depositors which must contain
a declaration that the deposit is not being made by out of any money borrowed
by him from any other money.
g)
Where
the secured deposits are issued by company, it shall create charge on the asset
of the company within 30 days from acceptance of deposits.
h)
The
circular shall only be issued within 30 days of the date of delivery of the
circular (duly signed by majority of directors of the Board of directors
approving the circular) to the Registrar of Companies for registration of copy
of circular.
i)
The
company issuing secured deposits shall execute a deposit trust deed in Form
DPT-2 at least seven days before issuing the circular.
j)
Every
company shall on acceptance or renewal of deposits furnish deposit receipt
within 21 days of amount received (realisation of cheque) to the depositor.
k)
Such
companies shall on or before 30th April every year required to
deposit amount equivalent to 20% of amount maturing in the following financial
year in a separate bank account which shall be called as Deposit Repayment
Reserve Account.
l)
No
company shall invite or accept or renew any deposit in any form, carrying a
rate of interest or pay brokerage thereon at a rate exceeding NBFC norms.
Premature Withdrawal of Deposits
On the request of depositors, the
company may make repayment of deposits after expiry of a period of six months from
the date of such deposits but before the expiry of the period for the deposit.
However, rate of deposit shall be reduced by 1% from the interest rate which
the company would have paid had the deposit been accepted for the period for
which such deposit had actually run.
Penal rate of Interest on Deposit
Every Company shall pay 18% per annum for
the overdue period in case of deposits, whether secured or unsecured, matured and
claimed, on remaining unpaid.
Punishment for Contravention
Where any company accepts or invites or
allows or cause any other person to accept or invite on its behalf any deposit
in contraventions of the manner of the conditions prescribed under section 73
or section 76 or rules made thereunder or Fails to repay the deposit or part
thereof or any interest due thereon within the time specified under section 73
or section 76 or rules made thereunder or such further time as may be allowed
by the Tribunal under section 73:
Ø
The
Company shall, in addition to the payment of the deposit or part thereof, Pay fine
of Rs. 1 Crores or twice the amount of deposit, whichever is lower which may be
extended to Rs. 10 crores
Ø
Every
officer in default may be liable for imprisonment which may extend to 7 years
with fine of Rs. 25 lakhs which may be extended to Rs. 2 crores.
Various Forms Under
Companies (Acceptance of Deposits) Rules, 2014
|
Form
No.
|
Purpose
|
|
DPT-1
|
Circular
or Circular in the form of advertisement inviting deposits
|
|
DPT-2
|
Deposit
Trust Deed
|
|
DPT-3
|
Return
of Deposits
|
|
DPT-4
|
Statement
regarding deposits existing on the commencement of the Act
|
DISCLAIMER
The material and information contained in this blog are for general information purpose only. Though we have made every efforts to make our interpretation correctly, we do not make representation either express or implied about the completeness or correctness of the subject matter. Under no circumstances the
author is not responsible / liable for any loss or damage caused to anyone due to any mistake / error
/ omissions.
