Ministry of Corporate Affairs notifies the Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Ministry of Corporate Affairs notifies the Companies (Acceptance of Deposits) Second Amendment Rules, 2017

November 9, 2017 Corporate 0

The Ministry of Corporate Affairs (‘MCA’) by way of Notification dated 19th September, 2017 has notified the Companies (Acceptance of Deposits) Second Amendment Rules, 2017 (‘Amendment Rule’) amending the Companies (Acceptance of Deposits) Rules, 2014 (‘Principal Rule’). The amendment has been made effective from 19th September, 2017.

The implication of the amendment has been captured in the table below:

Previous PositionPresent PositionImplication
Rule 3, Sub-Rule 3

 

(3) No company referred to in sub-section (2) of section 73 shall accept or renew any deposit from its members, 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 4[thirty five per cent] of the aggregate of the 2[Paid-up share capital, free Reserves and securities premium account] of the company.

5[“Provided that a private company may accept from its members monies not exceeding one hundred per cent of aggregate of the paid up share capital, free reserves and securities premium account and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified.”]

 

Rule 3 Sub-Rule 3

 

 

(3) No company referred to in sub-section (2) of section 73 shall accept or renew any deposit from its members, 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 4[thirty five per cent] of the aggregate of the 2[Paid-up share capital, free Reserves and securities premium account] of the company.

 

Provided that a Specified IFSC Public company and a private company may accept from its members monies not exceeding one hundred per cent of aggregate of the paid up share capital, free reserves and securities premium account and such company shall file the details of monies so accepted to the Registrar in Form DPT-3.

 

 

Explanation.— For the purpose of this rule, a Specified IFSC Public company means an unlisted public company which is licensed to operate by the Reserve Bank of India or the Securities and Exchange Board of India or the Insurance Regulatory and Development Authority of India from the International Financial Services Centre located in an approved multi services Special Economic Zone set-up under the Special Economic Zones Act, 2005 (28 of 2005) read with the Special Economic Zones Rules, 2006:

 

Provided further that the maximum limit in respect of deposits to be accepted from members shall not apply to following classes of private companies, namely:—

 

(i) a private company which is a start-up, for five years from the date of its incorporation;

 

(ii) a private company which fulfils all of the following conditions, namely:—

 

(a) which is not an associate or a subsidiary company of any other company;

(b) the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is less ; and

 

(c) such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under section 73:

 

Provided also that all the companies accepting deposits shall file the details of monies so accepted to the Registrar in Form DPT-3.”

 

 

 

The primary conditions for acceptance and renewal of deposits from its members by a private company remains the same even after the present Amendment Rule effective 19thSeptember, 2017.  However, the Amendment Rule has provided exemptions with respect to the maximum limit of accepting deposits from members by a private company.  As per the Amendment Rule, the following classes of private companies are exempted from accepting monies above the maximum limits i.e. one hundred percent of aggregate of the paid up share capital, free reserves and securities premium account:

 

(i) a company which is a start-up, for five years from the date of its incorporation;

 

(ii) a company which fulfils the following conditions:

 

a.    which is not an associate or a subsidiary company of any other company;

b.    the borrowings of such a company from banks or financial institutions or anybody corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is less ; and

c.    a company which has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under section 73.

 

The Amendment Rule also provides the revised format for the Form DPT -3 for filing the details of monies accepted as deposits to the Registrar of Companies.

 

 

 

 

 

 

 

 

 

 

 

The revised format for the Form DPT-3 has been attached for your reference.

Source: Ministry of Corporate Affairs

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