Acceptance of Deposits from Members
Applicable Sections
Sections 73 , 76A and 110 of
the Companies Act, 2013
Applicable Rule
Companies (Acceptance of
Deposits) Rules, 2014
Synopsis
Prohibition on acceptance of
deposits from public : A company is prohibited to invite, accept or renew
deposits from public. This prohibition would, however, not apply in case of
banking company and non banking financial company and such other company as the
Central Government may specify.
•It can, however, invite
deposits from its members subject to passing of a resolution in general
meeting, (such a resolution could be passed through postal ballot also) and
subject to, inter alia, the conditions specified below:
(a) depositing such sum which
shall not be less than fifteen per cent of the amount of its deposits maturing during
a financial year and the financial year next following, and kept in a scheduled
bank in a separate bank account to be called as deposit repayment reserve
account. This account shall not be used by the company for any purpose other
than repayment of deposits;
(b) providing such deposit
insurance in such manner and to such extent as may be prescribed ;(c)
certifying that the company has not committed any default in the repayment of
deposits accepted eitherbefore or after the commencement of the Companies Act,
2013 or payment of interest on such deposits ;
And
(d) providing security, if any
for the due repayment of the amount of deposit or the interest thereon including
the creation of such charge on the property or assets of the company. Where a
company does not secure the deposits or secures such deposits partially, then,
the deposits shall be termed as“unsecured deposits’’.
Penal consequences : Section
76A inserted by the Companies ( Amendment) Act, 2015 provides for penal
consequences for acceptance of deposits in contravention of the provisions of
the Act. Accordingly when a company:
•(a) accepts, invites or allows
another person to accept or invite on its behalf any deposit which is in contravention
to the provisions specified in the Act or rules under it ; or
(b) fails to repay the deposit
or any interest, either in part or whole, within the time specified in the Act,
or further time allotted by a Tribunal, it shall be subject to certain
penalties. The penalties include:
(i) a minimum fine of Rs one
crore and a maximum of Rs 10 crore, in addition to the deposit or interest that
is due; and
(ii) up to seven years
imprisonment and fine between Rs 25 lakh to Rs two crore, or both, for every defaulting
officer of the company;
If proved that the defaulting
officer of the company did so willfully, he will be liable for the offence of
fraud.
Procedure
1. Board meeting : A Board meeting
shall be convened to decide about inviting deposits from members and the text
of the advertisement to be published in the newspaper and to decide convening
of general meeting
2. General meeting : The
general meeting shall be convened to accord approval for invitation and acceptance
of fixed deposits from members.
3. Form MGT-14 shall be filed
with the Registrar within 30 days of passing the resolution.
4. Form and
particulars of advertisements or circulars: The company inviting deposit shall
issue a circular to all its members by registered post with acknowledgement due
or speed post or by electronic mode in Form DPT-1. The circular may also be
published in English language in an 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.
Before the issue, a copy of the
advertisement or circular is to be delivered to the Registrar not less than thirty
days before the date of such issue. [rule 4]
5. Deposit insurance : The
company inviting deposits shall enter into a contract for providing deposit insurance
at least thirty days before the issue of the circular or advertisement or at
least thirty days before
the date of renewal, as the
case may be. [rule 5]
The companies may accept the
deposits without deposit insurance contract till the 31st March, 2016 or till the
availability of a deposit insurance product, whichever is earlier.
6. Creation of security :
Company inviting secured deposits shall provide for security by way of a charge
on its assets as referred to in Schedule III of the Act, excluding intangible
assets of the company for the due repayment of the amount of deposit and
interest thereon for an amount which shall not be less than the
amount remaining unsecured by
the deposit insurance. [rule 6]
7. Appointment of trustee for
depositors : No company shall issue a circular or advertisement inviting secured
deposits unless the company has appointed one or more trustees for depositors
for creating security for the deposits. The company shall execute a deposit
trust deed in Form DPT-2 at least seven days before issuing the circular or
circular in the form of advertisement. [rule 7]
8. Maintenance of liquid assets
and creation of deposit repayment reserve account : Every company referred to
in sub-section (2) of section 73 and every eligible company shall on or before
the 30th day of April of each year deposit the sum as specified in clause (c)
of sub-section (2) with any scheduled bank and the amount so deposited shall
not be utilised for any purpose other than for the repayment of deposits.
The amount remaining deposited
shall not at any time fall below fifteen per cent of the amount of deposits maturing,
until the end of the current financial year and the next financial year. [rule
13]
9. Register of deposits: Every
company accepting deposits shall maintain at its registered office one or more
separate registers for deposits accepted or renewed, in which there shall be
entered separately in the case of each depositor the particulars as specified
under rule 14
10. Return of deposits to be
filed with the Registrar : Every company accepting deposits from members, shall
on or before the 30th day of June, of every year, file with the Registrar a return
in Form DPT-3 alongwith the fee as provided in Companies (Registration Offices
and Fees) Rules, 2014 and furnish the information contained therein as on the
31st day of March of that year duly audited by the auditor of the company.
[rule 16]
BOARD RESOLUTION
(for inviting deposits from the
members)
“RESOLVED THAT pursuant to the
provisions of section 73 and all other applicable RESOLVED FURTHER THAT the
Board of Directors or a Committee thereof be and is hereby authorised to amend
the terms and conditions of the said scheme as and when required and to sign
and execute deeds, applications, documents and writings that may be required on
behalf of the Company and generally to do all such other acts, deeds, matters
and things as may be necessary, proper and expedient or incidental for giving
effect to this resolution.” provisions of the Companies Act, 2013 read with
Companies (Acceptance of Deposit) Rules, 2014 as may be amended from time to
time and clarifications/guidelines issued by the Central Government, and
subject to the consent of the members of the company, consent of the Board of Directors
of the Company be and is hereby accorded to invite and accept fixed deposits
from the members within limits prescribed in the Act and overall borrowing
limits of the Company, as approved by the members from time to time and the
draft of the Circular for inviting / accepting Deposits from the Members and
the terms and conditions contained therein and as given in the Explanatory
Statement annexed hereto, be and the same is hereby approved.
GENERAL MEETING RESOLUTION
(for acceptance of deposits
from members)
““RESOLVED THAT pursuant to the
provisions of section 73 and all other applicable provisions of the Companies
Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 as may be
amended from time to time and clarifications/guidelines issued by the Central
Government, and subject to the consent of the members of the company, consent
of the Board of Directors of the Company be and is hereby accorded to invite
and accept fixed deposits from the members within limits prescribed in the Act and
overall borrowing limits of the Company, as approved by the members from time
to time and the draft of the Circular for inviting / accepting Deposits from the
Members and the terms and conditions contained therein and as given in the
Explanatory Statement annexed hereto, be and the same is hereby approved. section
73 and all other applicable provisions of the Companies Act, 2013 read with
Companies(Acceptance of Deposit) Rules, 2014 as may be amended from time to
time and clarifications/guidelines issued by the Central Government, consent of
the members be and is hereby accorded to the Board of Directors of the Company
to invite and accept fixed deposits from the members within limits prescribed
in the Act and overall borrowing limits of the Company, as approved by the
members from time to time and the draft of the Circular for inviting / accepting
Deposits from the Members and the terms and conditions contained therein and as
given in the Explanatory Statement annexed hereto, be and the same is hereby approved.”
“RESOLVED FURTHER THAT the
Board of Directors or a Committee thereof be and is hereby authorised to amend
the terms and conditions of the said scheme as and when required and to sign
and execute deeds, applications, documents and writings that may be required on
behalf of the Company and generally to do all such other acts, deeds, matters
and things as may be necessary, proper and expedient or incidental for giving
effect to this resolution.”
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