SECTION 73 OF COMPANIES ACT, 2013 (PROHIBITION ON ACCEPTANCE OF DEPOSITS
FROM PUBLIC) STATES –
(1) On and after
the commencement of this Act, no company shall invite, accept or renew deposits
under this Act from the public except in a manner provided under this Chapter:
Provided that nothing in this sub-section shall apply to a banking company and
non-banking financial company as defined in the Reserve Bank of India Act, 1934
(2 of 1934) and to such other company as the Central Government may, after
consultation with the Reserve Bank of India, specify in this behalf.
(2) A company
may, subject to the passing of a resolution in general meeting and subject to
such rules as may be prescribed in consultation with the Reserve Bank of India,
accept deposits from its members on such terms and conditions, including the
provision of security, if any, or for the repayment of such deposits with
interest, as may be agreed upon between the company and its members, subject to
the fulfilment of the following conditions, namely:-
(a) issuance of a circular to its
members including therein a statement showing the financial position of the
company, the credit rating obtained, the total number of depositors and the
amount due towards deposits in respect of any previous deposits accepted by the
company and such other particulars in such form and in such manner as may be
prescribed;
(b) filing a copy of the circular
along with such statement with the Registrar within thirty days before the date
of issue of the circular;
(c) depositing such sum which shall
not be less than fifteen per cent of the amount of its deposits maturing during
a financial year and the financial year next following, and kept in a scheduled
bank in a separate bank account to be called as deposit repayment reserve
account;
(d) providing such deposit insurance
in such manner and to such extent as may be prescribed;
(e) certifying that the company has
not committed any default in the repayment of deposits accepted either before
or after the commencement of this Act or payment of interest on such deposits;
and
(f) providing security, if any for the
due repayment of the amount of deposit or the interest thereon including the
creation of such charge on the property or assets of the company:
Provided that in case where a company does not
secure the deposits or secures such deposits partially, then, the deposits
shall be termed as “unsecured deposits” and shall be so quoted in every
circular, form, advertisement or in any document related to invitation or
acceptance of deposits.
(3) Every deposit
accepted by a company under sub-section (2) shall be repaid with interest in
accordance with the terms and conditions of the agreement referred to in that
sub-section.
(4) Where a
company fails to repay the deposit or part thereof or any interest thereon
under sub-section (3), the depositor concerned may apply to the Tribunal for an
order directing the company to pay the sum due or for any loss or damage
incurred by him as a result of such non-payment and for such other orders as
the Tribunal may deem fit.
(5) The deposit
repayment reserve account referred to in clause (c) of sub-section (2) shall
not be used by the company for any purpose other than repayment of deposits.
CLARIFICATION ON NOTIFICATION UNDER
SECTION 73(2) OF COMPANIES ACT, 2013
Previously, Ministry of Corporate
Affairs by notification No. G.S.R. 464(E), G.S.R. 463(E) and G.S.R. 466(E) dated 5th June, 2015 has given
several exemptions to Private Companies, stated as follows –
“Chapter V, clause (a) to (e) of sub
section (2) of section 73 shall not apply to a private company which accepts
from its members monies not exceeding 100% of aggregate of the paid up capital
and free reserves, and such company shall file the details of monies so
accepted to the registrar in such manner as may be specified.”
Via Notification dated 13th June,
2017 MCA has added more exemptions by amending the
notification dated 5th June, 2015 stated as follows –
“Provision of Section 73(2) clause (a-e)
shall not applicable on following Private Companies:
1) Which accept from its members monies
not exceeding 100% percent of aggregate of the paid up share capital, free
reserves and Securities Premium account; or
2) Which is a start-up, for five years
from the date of its incorporation; or
3) which fulfill all of the following
conditions, namely:-
A. Which is not an associate or a
subsidiary of any other Company;
B. If the borrowing of such a company
from the banks or financial institutions or anybody corporate is less than
twice of its paid up share capital or fifty crore rupees, whichever is lower;
and
C. Such a company has not defaulted
in the repayment of such borrowings subsisting at the time of accepting
deposits under the section.
Provided that the company referred to in
clause (A), (B) or (C) shall file the details of monies accepted to the
Registrar in such manner as may be specified”
References:
Companies Act, 2013
MCA
Contact:
CS Divyanshu Bansal
Email ID: divyanshubansal401@gmail.com
