Whether a private company can accept deposits from its members as per new Companies Act??

[Nisha]

Whether a private company can accept deposits from its members as per new Companies Act?? because Any amount received from the Members or relative of Director in a Private Company shall also be  considered as deposits.please resolve this ambiguity.. 

[Jyothi Shivayogi]

As per definition of Companies (Acceptance of Deposits) Rules 2014, deposits - does not include clause..1,2,3,...which does not cover members. 

As such, per my view Private Companies also cannot accept deposits from its members. And unsecured loans from members & relatives of Directors also covered.

Earlier, whenever Company required funds there was a easy option to give away one share for the depositor and accept money from him, with the introduction of the new act, I think this does not hold good any more.

And pursuant to Section 74, repayment of the existing deposits shall be repaid within 1 year!

Awaiting other members views on my understanding please.

JS

PCS

On Mon, Apr 14, 2014 at 4:49 PM, Nisha <uchil...@gmail.com> wrote:

Whether a private company can accept deposits from its members as per new Companies Act?? because Any amount received from the Members or relative of Director in a Private Company shall also be  considered as deposits.please resolve this ambiguity.. 

--
--
************************************************
Mail your comments, feedback and suggestions on CSMysore to Moderator: datta...@gmail.com and Manager: vivekhe...@gmail.com
---
You received this message because you are subscribed to the Google Groups "CSMysore" group.
To unsubscribe from this group and stop receiving emails from it, send an email to csmysore+u...@googlegroups.com.
For more options, visit https://groups.google.com/d/optout.

[Jude Dsouza]

Deposits can be accepted from its members. Please refer Section 73 (2) of the Companies Act, 2013.

Hence, no matter private or public every company incorporated under the Companies Act, 1956 or 2013 can accept deposit from its members.

Hence, Private Companies can accept deposit from its members, provided certain conditions are fulfilled and the limit prescribed is not exceeded.

[Jyothi Shivayogi]

Dear Mr.Jude

Can you please explain me what does section 74 says then?

Regards

JS

--

[Vivek Hegde]

Dear Ms. Jyothi,

I agree with Jude. Section 74 is a transition provision where deposits were accepted under old Act.

As per my understanding, private limited companies can accept deposits from members as per provisions of Section 73 read with rules.

Warm Regards

CS Vivek Hegde,B.com, ACS, CWA

Vivek Hegde & Co.
Company Secretaries
No. 2034, 26th Cross, K.R.Road
Banashankari II Stage, Behind 

Sevakshetra Hospital

Bangalore-560070
Mob : 09900898223

Off: 080 26710677

[Jyothi Shivayogi]

Thanks Mr.Vivek

Now, my question is, most of our clients have issued 1 or 2 shares to shareholders and obtained monies from them & kept in unsecured loans as on 31/03/2014 BS.

Then as per section 74, do we have to repay to them with in one year from the date of commencement of the act?

Means, we should repay u/s 74 & can obtain fresh u/s 73 (2). 

Is my understanding correct?

Thanks & Regards

JS

[Vidhya]

No. In new companies Act,2013 you cannot accept deposit from members and their relatives unless the stipulation condition is satisfied.

But you can accept deposits from directors

Regards,

Vidhya

[Rajesh]

Yes, that is the confusion to be clarified.

The intention of the Legislature is not clear.

As rightly pointed out by Mr. Vivek, any Company can accept Deposits from Members provided the conditions mentioned under Section 73(2) read with the Rules are satisfied.

But, as per Section 74 the amount of deposit received under CA, 1956, needs to be repaid within one year.  And as rightly pointed out by Ms. Jyothi, plain reading of Section 73 and 74, gives an impression that the Company can repay and take the deposit again.  This wouldn't have been the intention of the Legislature. 

Lacks clarity,

Rgds,

[Vivek Hegde]

Dear Mr. Rajesh,

I think intention would be to cover the unsecured loans from Members also (hitherto these were simple unsecured loans from members) under the deposit regulations for more controls and checks.

Accordingly, if you want to accept anymore unsecured loans from members, you have follow stringed deposit rules. 

Warm Regards

CS Vivek Hegde,B.com, ACS, CWA

Vivek Hegde & Co.
Company Secretaries
No. 2034, 26th Cross, K.R.Road
Banashankari II Stage, Behind 

Sevakshetra Hospital

Bangalore-560070
Mob : 09900898223

Off: 080 26710677

[BINDU MADHAVA]

Either you need to comply with rule 3(a) of the acceptance of deposit rules, 2014 chapter 5 or
You can take shelter under proviso to rule 3(a)

regards
Bindu Madhava K G

[kiran Bhat]

Pvt Ltd Company can accept upto 25% paid up share capital and free reserves as deposit from members subject to fulfillment of certain conditions.

Kiran

[kandala paritosh]

Dear ms. Jyothi

As per my view  your understanding is correct.

regards

PARITOSH

[Raghavendra Bhat]

Dear All,,

As per \Companies (Acceptance of Deposits) Rules 2014, 

4. (i) No company under sub-section (2) of section 73 shall accept or

renew any deposits if the amount of such deposits together with the

amount of other deposits outstanding as on the date of acceptance or

renewal of such deposits exceeds 25 per cent of the aggregate of the

paid-up share capital and free reserves of the company

(ii) No Eligible company shall accept or renew:

(a) any deposit from its members, if the amount of such deposit

together with the amount of deposits outstanding as on the date of

acceptance or renewal of such deposits from members exceeds ten per

cent of the aggregate of the paid-up share capital and free reserves of

the company;

By reading above rules, Company can accept over all deposit up to 25% aggregate of the paid-up share capital and free reserves. But from members up to ten percent aggregate of the paid-up share capital and free reserves can be accept.  

Thanks & Regards
Raghavendra Bhat
Phone - 8951532022

[Ashok Modi]

SIR

PLEASE  EXPLAIN THE PROCESS TO BE FOLLOWED ?

 

SRG Housing Finance Limited

321, S.M. Lodha Complex ,Near Shastri Circle,

Udaipur Rajasthan -313001.

Ph. No. 0294-2561882, Fax : 0294-5100098,

Email: in...@srghousing.com, website: www.srghousing.com

 

On Tue, Apr 15, 2014 at 12:22 PM, kandala paritosh <cspari...@gmail.com> wrote:

[Indrani Sanka]

The procedure for acceptance of deposits is below:

http://cusprofessionals.blogspot.in/2014/03/deposits.html

Regards,

Indrani