In last two posts here and here, we discussed terms and conditions of a deposit and circular and advertisement issued by a company for acceptance of deposit. Now, we will discuss measures for protection of depositors under the Companies Rules, 2014. Before discussing these rules, I recommend you to refer my earlier post here for general provision related to deposit under the Companies Act, 2013.
MANNER AND EXTENT OF DEPOSIT INSURANCE:
In last post here, we discussed terms and conditions for deposit accepted by a company. General provisions under the companies Act 2013 was earlier discussed here. In this post, we will discuss advertisement or circular issued by a company for acceptance of deposit.
Circular and Advertisement:
Every company referred to in sub-section (2) of section 73 intending to invite deposit from its members shall issue a circular to all its members by registered post with acknowledgement due or speed post or by electronic mode in Form DPT-1. The circular may, additionally, be published in English language in an English newspaper and in vernacular language in a vernacular newspaper having wide circulation in the State in which the registered office of the company is situated.
In last post here, we discussed definition and all exclusions and inclusions of definition of deposit in detail. In earlier post here, we have discussed general provisions on deposits as listed out in the Companies Act, 2013. Without repeating all that discussion, in this post we will take forward our discussion Terms and conditions of acceptance of deposit under Rule 3 of the Companies (Acceptance of Deposits) Rules, 2014.
A company referred to in Section 73(2) may accept deposit from its members while an eligible company may accept deposit for members and Public.
Duration of a Deposit:
Clause (31) of Section 2 of the Companies Act, 2013 define Deposits inclusively as any receipt of money by way of deposit 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 Reserve Bank of India.
Clause (c) of Rule 2 of the Companies (Acceptance of Deposits) Rules, 2014 further elaborates definition of deposit. The “deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include –