Sec. 73 Of Companies Act 2013: Deposits In Company Law
Updated: Oct 4, 2022
Provisions relating to deposits along with the Companies (Acceptance of deposit)
Rules,2014 are given below :
As per section 2(31),’ Deposits’ includes any receipt of money by way of deposits or loan or in any other form by a company but does not include such categories of amount as may be prescribed in consultation with the RBI.
What is a Deposit?
‘Deposit’ in Company Law includes any receipt of money by way of deposits or loan or in any other form by a company, but does not include :
Any amount received from the Central Government or a State Government, or any amount received from any other source whose repayment is guaranteed by the Central Government or a State Government, or any amount received from a local authority, or any amount received from a statutory authority constituted under an Act of Parliament or a State Legislature;
Any amount received from Foreign Governments, foreign or international bank multilateral financial institutions;
Any amount received as a loan or facility from any Bank or Financial Institution;
Any amount received against the issue of commercial papers or any other instrument;
Any amount received by a company from any other company (Inter-corporate deposits);
Any amount received towards a subscription to any securities, including share application money or advances towards the allotment of securities pending allotment.
Any non-interest bearing amount received or held in trust;
Any amount received in the course of, or for the purposes of, the business of the company, such as an advance for the supply of goods or provision of services or sale of property, provided that if the aforesaid amount becomes refundable on account of not getting the requisite approval/permission, then the money should be refunded within fifteen days from the date it becomes due for refund. Otherwise, it shall be treated as a deposit ;
Any amount brought in by promoters of the company by way of unsecured loan subject to fulfillment of the following condition:
The loan is brought in pursuance of stipulation imposed by the lending financial institution or bank or the promoters to contribute such finance ;
The loan is provided by the promoters themselves or by their relatives or by both and not by their friends and business associates;
The exception shall be available only till the loans of the financial institutions or banks are repaid and not thereafter.
Types of Deposits in Company
1. Acceptance of Deposits from the Members (sec.73 of Companies Act 2013) - Any company can accept deposits from its members, subject to the passing of a resolution in a general meeting and subject to certain specified conditions.
In order to accept deposits from the members, the company has to certify, in circular, that it has not committed any default in the repayment of the deposits received either before or after the commencement of the act or payment of interest on such deposits.
2. Acceptance of Deposits from the Public (sec.76 of Companies Act 2013) - Only a public company, having a net worth of not less than one hundred crore rupees OR a turnover of not less than five hundred crore rupees can accept deposits from the public. Such companies are also known as Eligible Companies. Furthermore, they must also pass a special resolution to do so.