Acceptance of deposit by companies according to Companies Act
Acceptance of deposit by companies:
Acceptance of deposit on the private limited registration company not common one for the other forms of companies like NBFCs, HUFs and other form of Nidhi Companies. As per the rules of the Companies rules, 2014 Deposits can be receivable in the name of the company through instalments or directly getting the deposit from other companies. The other companies could issue the deposit through a base of the promise. Promise nothing but a contract or agreement. In this agreement, the return of the money with specified period need to be mention.
Is there any option to pay it earlier or the noticing time in the agreement also added in this specification. Additional contributions like interest also can be adding as the essential feature of the agreement. Means of receipt of the money can be deposit or loan. It needs to be clear in the agreement form.
Acceptance of deposit and its limitation:
Deposit amount receiving is limited one from where it received. The deposit amount from the central government or state government is not accepting as the category of deposit.
Repayment is guaranteed by the central or state government is not accepted in this category.
Local and statutory authority constitution and directly from the state legislature are not coming under this category.
Foreign government and abroad bank or financial institution relating amounts are not adding in the category of the deposit form. International Finance Corporation, Asian development banks, Common wealth development banks can be allowing to deposit. The influence of the foreign bodies is acceptable one in this deposit category.
Private limited company registration or other types of companies are needed to know these basic categories before them entering into the compliance. The company’s management authoritative person resides in Outside India subjected to the Foreign Exchange Management.
Acceptance of the deposit and it purpose:
Deposit of the Private limited registration can be the advance for the purpose of goods and supply or service provision. One year period is allotting on the issue of deposit. If the amount involving with any other legal proceeding this period will not be applied one. The other properties can be collateral for the issuing of the deposit. The properties can be the legal papers of moveable or immovable assets. The feature of security deposit is acceptable one in this deposit method.
Any member of the private company made the deposit with the relating provision noted under the section 73 of the companies act. The limitation of the company is totally different one from the public limited company. Registering public limited company requires theexcessive deposit amount. Comparing with private limited company it is huge one. Provisions relating the public limited company noted in the section 76 of the companies act.
Period of deposit issue:
The companies in general it can be the private limited company or public limited company mandatory to come under the section 73. Without the eligibilities the acceptance and renewal on deposit is not possible. For the eligible companies secured, unsecured and demand of repayable acceptable within less than six month period or more than three years of time. The short term requirement of the company is in the form of funds. These funds accept or renew can pay earlier from the date of deposit renewal.
The deposit amount not exceeds 10 percentage of aggregation of the paid up share. At the same time earlier repayment not earlier than three month period from the date of deposit and renewal. Deposits are accepting under the joint names. The joint members are not more than three members is the basic condition.
Acceptance rate of brokerage:
The maximum rate and interest are solely deciding by the Reserve Bank of India. The prescriptions of deposit for the Non-banking finance company also deciding by the RBI. Authorised director or person from the proper private limited company registration can wrote to solicit the deposit on behalf of the company. Personally entitled with name of the person and use it other purpose except the notification on the agreement taking as the violation of rules. Such companies shall not reserve itself either directly or indirectly to alter the provision. ]
It raises the prejudice and it can be the great disadvantage to the depositor. The terms of the condition is applying on the deposit or other trust deed or deposit insurance contract after circular either in the form of advertisement is acceptable one in deposit issue. This acceptance of deposit is mandatory to inform the members of the company. DPT-1 is requiring form for this process.
Publishing in a newspaper:
Advertisement purpose of the DPT form the advertisement publishes in One English newspaper and one vernacular newspaper. The choosing of the newspaper medium is compulsive to have wide circulation in the state where the registered office of the company situated. Suppose the public companies inviting their deposit from the public mention it through their official website. Other private limited company should follow this procedure without any fail. The board of directors of the company have the sole issue the deposits. Other than the single person or authoritative directors are not coming in this line.
The issue of the advertisement not delay more than thirty days before the actual process of deposit issue. It is officially informing to the registrar of companies. The board members all are signing on the resolution and it officially handover to the registrar with their board approval.
Importance of circular in the form of advertisement:
The form of advertisement issued is valid one until the financial year completion. The validation of the newspaper advertisement expires after the closing of financial year. At least six month of time period is taking its importance in the private limited company registration and its sub process of deposit issue. Financial statement is need to be an essential proof at the general meeting first held after the deposit issue. So, this circulation of advertisement is the essential process is the acceptance and issue of deposits and shares of the company.
Conclusion:
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