BY: - KETAN SARDANA For CA, CS & OTHER PROFESSIONAL COURSES COMPANIES ACT 2013 Acceptance Of Deposits By Company J MD T A XA T I ON & L A W C ODE P a g e | 1
PREFACE TO MY FIRST EDITION It gives me immense pleasure, in helping the student community in particular by writing some notes in a simple, lucid manner. Since, the book assumes no previous knowledge of the subject on the part of, the Reader, its aims complete clarity for the beginner and simplicity which makes the text self-explanatory, I express my sincere gratitude to, all those who have stood by me, in this noble task. I, take this opportunity, in thanking my parents, my friends, readers, my well-wishers, and yes God for their blessings and support, I feel confident that the notes will meet a real need. If it is widely read and wisely used, I shall feel amply rewarded. I shall gratefully acknowledge any suggestions to further increase the utility of the book, and readily incorporate them for the betterment of my next edition of notes
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1) On and after commencement of the Act, Every company shall invite , accept, renew deposit in the manner provided in this Act
2) This shall not apply to Banking companies and NBFC under the RBI Act 1934 and other companies which the central government notifies in consultation with RBI
3) A company can accept deposits only after passing resolution in general meeting in consultation with the Reserve Bank of India
4) Conditions for the issue of Deposits a) Issuance of circular to its member containing financial position of the company Credit rating obtained Total number of depositors amount due towards deposit and such other particulars b) Filing a copy of circular along with the statement to the Registrar within 30 days before the issue of circular c) Deposit a sum =15% of the amount of deposit maturing during the year AND next financial years and kept in scheduled bank d) Certifying that company has not defaulted in repayment of deposits e) Providing security for any amount of deposit or interest thereon
5) Every deposit shall be repaid with the interest in accordance with the terms of agreement
6) Where company fails to pay deposit or interest the depositor concerned may apply to the Tribunal directing the company to pay such sum due for any loss or damage incurred on the non-payment
Sec 74: Repayment of deposit accepted before the commencement of this Act
1) Wherein the respect of deposit accepted before the commencement of the Act the amount of such deposit or interest due which remains unpaid before the commencement or after the company shall file within period of three month from such commencement or date thereof with the Registrar A statement showing the all deposits accepted + sums remaining unpaid + interest and arrangement for such repayment repay within one year from such commencement OR from the date on which such repayments are due
2) The Tribunal after taking into the financial position , amount of deposit and other matters allow further time
3) Default :- when the company fails to repay the deposit within the time prescribed including the extended time limit the company in addition to the deposits or interest be punishable
Company with a fine ----- Minimum 1 crore ; Maximum 10 crore Every officer-------- imprisonment of 7 years OR Fine:- Minimum of Rs 25 lakhs Maximum to 2 crore OR both
1) When the company fails to repay the deposits within the time limit prescribed with the intent to defraud the depositors or any fraudulent purposes EVERY OFFICER OF THE COMPANY WHOIS RESPONSIBLE SHALL BE LIABLE UNDER SEC 447 for all or any of those damages that may have been incurred by the depositors
2) when the company fails to repay the deposit or part thereof or interest and any loss is incurred by person , association of person then suit or proceeding can be initiated by such person against the company
Sec 76: Acceptance of deposits from public by certain companies
1) A public company may accept the deposits from person other than its member subject to the compliance with the requirement of sec 73(2) and subject to such rules as the Central Government in consultation with the RBI
2) Conditions : company shall obtain the credit rating from recognized credit agency at the time of invitation from deposit which ensures adequate safety and rating shall be obtained every year
3) Every company accepting secured deposit from public shall within 30 days of such acceptance create such a charge on its asset which will not be less than the amount of deposits accepted in favour of deposit holder
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