MCA on Tuesday brought about year’s 2nd amendment to the Acceptance of Deposit Rules, 2015
- In the Companies (Acceptance of Deposits) Rules, 2015, the definition of Deposits provides certain exemptions where in the amount is not to be considered as a Deposit, Clause (viii) of the said definition exempts amount received from director of the company, subject to the declaration given by the respective director; that the amount is not out of the funds borrowed or loan accepted from others.
Widening the scope of the said exemption, MCA substituted the same by including amount received from relatives of director in the exempted category. The relatives from whom money is accepted by the Company is also required to give a declaration that the amount is not out of borrowed fund or loan accepted by the relative.
The Company is also now required to disclose the details in the report of the board of director.
- Rule 3 of the companies (acceptance of deposits) Rules, 2015 restricts a company from accepting or renewing deposits that are repayable on demand or upon notice received in less than 6 months or more than 36 months from the date of acceptance or renewal.
However, in order to suffice the short term fund requirements of the company it allows acceptance of deposits repayable earlier than 6 months subject to conditions that:
The amount of deposits shall not exceed 10% of aggregate paid up capital & free reserves (now Securities Premium Accounts also included) & shall not be repaid earlier then 3 months from the date of acceptance or renewal.
The said circular can be accessed at the following link: Notification No. GSR 695 (E)_dated 15.09.2015 Acceptance of Deposits 2nd Amendment Rules 2015