Chapter V of the Companies Act 2013 (Sec 73 – 76), Draft Rules
of the Companies Act 2013
And
Companies Act 1956 (Sec 58 A)
Applicability: To all Companies other than the following with effective from April 1, 2014
Exemption:
- Banking companies,
- NBFC,
- Housing Finance Companies and
- Such companies specified by Central Government
Exemption:
- Banking companies,
- NBFC,
- Housing Finance Companies and
- Such companies specified by Central Government
Major Changes in comparison with the Companies Act 1956:
- Introduction of the concept of “Deposit Insurance”
Deemed Deposit:
a.
Share application money: money has been received
but securities were not allotted within 60 days from the date of receipt, nor
it was refunded within 15 days from the completion of 60 days.
.
Acceptance of deposits by companies:
- No company shall accept any deposit
that is repayable
on demand or on receiving a notice within a period of less than 6
months or more than 36 months from the date of acceptance or renewal of
deposit.
-
Companies can take short term deposits
satisfying the following conditions:
o
Deposits < 10% of the
aggregate of paid up share capital and
free reserves of the company and
o
Repayable not earlier than 3
months from the date of deposit or renewal
-
No company shall accept deposit
or renew deposit
o
From members : if
the O/S deposit as on the date of acceptance or renewal of deposit exceeds10% of
the paid up share capital and free reserves
o
From others: if
the deposits outstanding as on the date of acceptance or renewal of such
deposits exceeds 25%of
the aggregate of the paid up share capital and free reserves
o From
Government companies: if the deposits outstanding
as on the date of acceptance or renewal of such deposits exceeds 35%of
the aggregate of the paid up share capital and free reserves
Rate of Interest on Deposit:
Same
as interest rate prescribed by the RBI for Deposits taken by NBFCs
Procedural
Flow Chart for Acceptance of Deposits under the Companies Act 2013
Detailed
Procedure for Companies to invite, accept or renew deposits from the public:
Sr No
|
Particulars
|
Details
|
1
|
Resolution:
|
Company
to pass a Resolution in General Meeting subject to the rules and procedures
specified by the RBI. (ie. Terms and Conditions for acceptance, repayment of
deposit and details of security if any and other related information)
|
2
|
Circular:
|
The
circular to be filed with ROC within 30 days before issuing the same to the
members. (Form No 1)
a.
The circular to contain the
following information:
i.
Financial position
ii.
Credit rating
iii.
Total number of depositors
and amount due towards deposits
b.
The circular to be advertised
in a vernacular newspaper where the registered office of the Company is
situated, and on the website of the Company.
c.
Validity
of the Circular: The circular shall be valid
until the expiry of 6 months from the date of closure of the financial year
or until the date of the AGM where the financials are laid before the Members
and if no AGM is conducted during the year then, it shall be valid until the
due date of the AGM.
|
3
|
Deposit Repayment
Reserve Account:
|
A
sum of not less than 15% of the amount of deposit maturing during a financial
year shall be deposited in a separate bank account namely Deposit Repayment Reserve
Account in a scheduled bank. This amount shall be used only to repay the
deposits and care shall be taken that the amount deposited is not less than
15 % at any time during the deposit period.
|
4
|
Deposit Insurance:
|
-
Company to take deposit
insurance atleast 30 days before the issue of the circular.
-
The deposit insurance shall
provide for full payment of the deposit amount if it is less than Rs. 20000
or a minimum of Rs, 20, 000 when it exceeds such amount.
|
5
|
No Default Certificate
|
No
Default Certificate to be produced
|
6
|
Creation of Charge:
|
Appointment of Trustee:
The Company shall appoint a Trustee and shall file Form 2 at least
7 days before issuing the circular.
A charge may be created on
the security of the company for repayment of the deposit. (Creation of charge is optional as the words used are
“if any”).
The
security to be created in favor of the Trustee on behalf of the deposit
holders.
Query
What
is the manner of creation of the charge? Should form 8 be filed or would
another form be introduced by the MCA?
|
7
|
Deposit receipts
|
Within
2 weeks from the date of receipt of money or realization of cheques the Company
to furnish the deposit receipts to the depositors.
|
On Failure to repay deposits:
-
The depositor concerned can apply to the Tribunal
for an order.
Query: What is the penal
provision if the company defaults in complying with the Order of the Tribunal?
-
The penal rate of interest
shall be 18% p.a
Deposits accepted prior to the applicability of the
Companies Act 2013:
Repayment of deposits etc.,
Accepted before commencement of this Act: Sec 74
-
Statement to be filed: The Company to file a statement containing the details of
deposits accepted, due and other related details within 3 months from the date of commencement
of the act or from the due date on which the payments are due.
-
To repay the deposits that
are due within 1 yr from the date of commencement of act or from the due
date whichever is earlier.
-
If the company is unable to
repay within 1 year it can approach the tribunal and request for granting
extension of time for repayment of the deposits.
Failure to repay within the time
limit granted by the Tribunal:
-
Fine: Rs. 1 Crs
- Rs 10 Crs
-
Officer in default:
o
Imprisonment: Upto 7 years
o
Fine: Rs 25 L – Rs 2 Crs
|
Criteria: Intention to defraud the depositors:
The aggrieved depositor can initiate
legal proceedings against the company for the losses incurred by him.
Register of deposits:
Every
company shall maintain register(s)for deposits accepted / renewed, as detailed in
the rules.
Return of deposit to be filed with the Registrar:
Every
company to whom these rules apply shall file with the registrar along with a
copy to RBI, a return in Form 3 audited by the auditor who shall give his
report as per the form on or before June 30thof every year
