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Recently MCA has issued a notification dated 22nd January 2019 effective from the same date in which the authority has made certain amendments which is of much significance in the Companies (Acceptance of Deposits) Rules, 2014.Companies finds that funds obtained by the way of deposits from their members and others play a useful part in supplementing their need of resources for the revenue expenses. Deposits can be a secured or unsecured borrowing. Firstly, let’s understand “what is deposit? and what is not deposit?”
Deposit is a sum of money paid into a bank it also refers to a part of funds used as security for the delivery of services. Company place funds into an account to increase the credit balance of the Company’s Account and to meet out the working capital.
Deposits are of 2 kinds-
The sum of money which do not fall within the ambit of the definition of deposits under the Companies Act 2013 are-
Sections 73 to 76A of Companies Act, 2013 provide the provisions related to acceptance of deposits;
The authority has made certain amendments by introducing New section 76A i.e .When a company accepts or invites any other person to accept or invite on its behalf any deposits in contravention of the manner prescribed under section 73& 76 or if the company fails to repay the deposit or part of it-
The company shall in addition to the payment due and the interest thereon shall be punishable which shall not be less than 1 crore rupees or twice the amount of deposits, whichever is lower, but which may extend to 10 crores.
Every officer involved and is in default shall be punishable with imprisonment which may extend to 7 years/and fine which shall not be less than 25 lakh rupees with maximum extension to 2 crore rupees. (Section 76A)
As per the amendment the companies are required to file return in terms of reporting to the Registrar of Company –
The company will file one time return which will give the details of the outstanding receipt of money/loan which has not been considered as Deposits as per the rule 2(1)(c) of the rules and the reporting has to be made by the company within 90 days of the said publication i.e. 22nd January 2019.
The company will give the details of particulars of transaction which are not considered as deposits within 30th June of every year.
A Company by passing ordinary resolution may accept deposits from its members subject to the fulfillment of following conditions-
A circular shall be issued to the members and the same must be filed along with the statement with the registrar within 30 days before the date of the issuance of the circular and the statement should reflect-
a. Financial position of the company
b. Credit Rating obtained by the company
c. Details of Existing Depositors
d. Amount due to existing Depositors.
Every company falling under the provision shall deposit on or before the 13th day April each year, such sum which shall not be less than 20% of the amount of its deposits maturing during the financial year by opening a separate account in a scheduled bank termed as “Deposit Repayment Reserve Account”.
Excluding the Government Companies, the amendments will cover almost all the companies i.e. Public or Private companies as almost all the receipts of money falls under the list of Rule 2(1)(c). The central government has specified to certain class /companies to whom the provisions shall not apply. The receipts which are excluded from the rule 2(1) (c) are as mentioned below-
Note As mentioned above,Banking companies and NBFCs are not required to fulfill the compliances of the provisions related to acceptance of Deposits as per the provisions of Section 73 of Companies Act 2013.
It also excludes amount accepted by-
The minimum and maximum period of Deposits is-
Exception-Short term Deposits.
Every Company Shall File A Return of Deposits in FORM DPT-3 with the roc on or before 30th June of every year which shall be duly certified by the auditors of the Company.
It is clarified by MCA that such amounts received by the private companies prior to 1st April 2014 shall not considered as deposits as per the companies Act 2013 subject to the condition that such private companies shall disclose in the notes to its financial statement for the financial year commencing on or after 1st April 2014.The amendment has been made to know to what extent the ROC were successful on obtaining the required details and will benefit them from getting those information on a regular basis at one place. In the new reporting requirements, the companies will have to disclose details of all these transactions even though the same are not deposits.