ACCEPTANCE OF DEPOSITS BY COMPANIES (1).ppt

ACCEPTANCE OF DEPOSITS BY COMPANIESFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901

From:- B. K. Gupta & Associates, Company Secretaries

IntroductionChapter V of the Companies Act 2013.Consisting Sections 73 to 76Deals with acceptance of deposits by the CompaniesImplemented w.e.f. 01.04.2014From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901

From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901

Prohibition on acceptance of deposits from public. (Section 73)(Corresponding to Section 58A)

On and after the commencement of this Act, no company shall invite, accept or renew deposits under this Act from the public except in a manner provided under this Chapter.From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Nothing contain in this sub-section shall apply to:a Banking Company

Non Banking Financial Company (NBFC) as defined in the Reserve Bank of India Act, 1934

Company specified in this behalf by the Central Government after consultation with the RBI

Public Company having such net worth or turnover as may be prescribed (Section 76)From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Company may invite, accept or renew deposits only from its members subject to:Passing a resolution at the General Meeting

Subject to such rules as may be prescribed in consultation with the RBI

Subject to such terms and conditions, including the provision of security, if any, or for the repayment of such deposits with interest, as may be agreed upon between the Company and its Members



The fulfillment of the following conditions ,namely:Issuance of a circular to its members including therein a statement showing:the financial position of the companythe credit rating obtainedthe total number of depositorsthe amount due towards deposits in respect of any previous deposits accepted by the Companyand such other particulars as may be prescribedFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Filing a copy of the circular along with such statement with the Concerned Registrar within 30 days before the date of issue of the circular;

Creation of Deposit Repayment Reserve AccountFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Deposit Repayment Reserve Account

Creation of Deposit Repayment Reserve Account and depositing such sum which shall not be less than 15% of the amount of its deposits maturing during a financial year and the next following financial year

This amount shall not be used by the company for any purpose other than repayment of deposits.



Providing Deposit Insurance

certifying that the company has not committed any default in

the repayment of deposits

payment of interest on such deposits

accepted either before or after the commencement of this Act



Providing security, if any for the due repayment of the amount of deposit or the interest thereon

Provided that in case where a company does not secure the deposits or secures such deposits 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.From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Repayment

Deposit accepted by a Company shall be repaid with interest in accordance with the terms and conditions of the agreement.From:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Failure in Repayment the Depositor concerned may apply to the Tribunal for an order directing the company to:pay the sum due or any loss or damage incurred by him as a result of such non-payment andfor such other orders as the Tribunal may deem fit.



Repayment of deposits, etc., accepted before commencement of this Act. (Section 74) (New Provision)in respect of any deposit accepted by a company before the commencement of this Act, the amount of such deposit or part thereof or any interest due thereon remains unpaid, the company shall

file, within a period of 3 months with the Registrar a statement of all the deposits and sums remaining unpaid on such amount with the interest payable thereon along with the arrangements made for such repayment

repay within one year from such commencement or from the date on which such payments are due, whichever is earlier



Acceptance of deposits from public by certain companies. (Section 76) (corrosponding to section 58A)

Notwithstanding anything contained in section 73, a Public Company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to: compliance with the requirements provided section 73(2) such rules as the Central Government may, in consultation with the RBI



such a company shall be required to obtain the rating from a recognized credit rating agency

every company accepting secured deposits from the public shall within 30 days of such acceptance, create a charge on its assets of an amount not less than the amount of deposits accepted in favour of the deposit holdersFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


Draft Rules Under the Companies Act, 2013Definitions of:

Deposits: Deposit includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include-

any amount received from the Central Government or a State Government or from a local authority or statutory authority constituted under the Act of Parliament any amount received from foreign Governments, foreign/international banks, foreign collaborators, foreign bodies corporate and foreign citizens, foreign authorities or persons resident outside India subject to provisions of FEMAany amount received as a loan or facility from any banking companyFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


any amount received as a loan or financial assistance from Public Financial Institutions, Insurance Companies, Scheduled Banks and Mutual Funds registered with SEBI .any amount received against issue of commercial paperany amount received by a company from any other companyany amount received and held towards subscription to any securities, including share application money or advance towards allotment of securities pending allotmentany amount received from a person who, at the time of the receipt of the amount, was a director of the company any amount received from an employee not exceeding his annual salaryany non-interest bearing amount received or held in trustFrom:- B. K. Gupta & Associates, Company Secretaries Email ID- [email protected] Phone no.- 9780016901


any amount received in the course of, or for the purposes of, the business of the company as an advance for the supply of goods or advance, accounted for in any manner whatsoever, received in connection with consideration for property under an agreement or arrangement or as security deposit for the performance of the contract for supply of goods or as advance received under long term projects

any amount brought in by the promoters of the company by way of unsecured loan



Eligible Company as referred to in sub-section (1) of section 76

It means a public co. having a: net worth of not less than Rs. 100 crore Or turnover of not less than Rs. 500 crore

and which has obtained the prior consent of the co. in general meeting by means of a special resolution.



New Rules V/S Old Rules Rules Under the Companies Act, 2013

Furnishing of deposit receipts to depositors.

Every Co. shall furnish a deposit receipt for the amount received by the Co. within a period of 21 days from the date of receipt of money Companies (Acceptance of Deposits) Rules, 1975Furnishing of deposit receipts to depositors.

Every Co. shall furnish a deposit receipt for the amount received by the Co. within a period of 8 weeks from the date of receipt of money



Details to be included in the Register Of Deposits

Additional disclosures along with earlier disclosures

PAN of the depositor/s;Particulars of guardian, in case of a minor;Particulars of the nominee;Deposit receipt number;Due date(s) for payment of interest;Details of deposit insurance including extent of deposit insurance

Details to be included in the Register Of Deposits

Name and address of the depositor; Date and amount of each deposit; Duration of the deposit and the date on which each deposit is repayable; Rate of interest; Date or dates on which payment of interest will be made; Any other particulars relating to the deposit.



Penalty

If any Co. u/s 73 or any Eligible Co. inviting deposits or any other person contravenes any provision of these Rules for which no punishment is provided in the Act, the Co and every officer of the Co who is in default or such other person shall be punishable with fine which may extend to Rs. 5,000 and where the contravention is a continuing one, with a further fine which may extend to Rs. 500 for every day after the first day during which the contravention continues.Penalty

If any Co. inviting deposits or any other person contravenes any provision of these Rules for which no punishment is provided in the Act, the Co and every officer of the Co who is in default or such other person shall be punishable with fine which may extend to Rs. 500 and where the contravention is a continuing one, with a further fine which may extend to Rs. 50 for every day after the first day during which the contravention continues.



ACCEPTANCE OF DEPOSITS BY COMPANIES (1).ppt

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