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2014

BY: - KETAN SARDANA
For CA, CS & OTHER
PROFESSIONAL COURSES
COMPANIES ACT 2013
Acceptance Of Deposits By
Company
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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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This Book is dedicated to LORD GANESHA and
SARASWATI MAA





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Acceptance Of Deposits By
Company














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Sec 73: Acceptance of Deposits by
companies


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





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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







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Sec 75: Damages for fraud



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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