Deposits - Private Company

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2010 The Companies Act, 1956 amended effective December 2000 stipulated that existing private companies are restricted from acceptance of deposits from the public.However,Rule 2 clause (b), sub-clause (ix) of the Companies (Acceptance of Deposits) Rules, 1975 permits:
" any amount received from a person who, at the time of the receipt of the amount, was a director of the company or any amount received from a relative of a director or its member by a private company "

The question is whether Private Companies formed prior to this amendment,are required to amend the Articles with regard to the restriction to invite deposits from the public ?

Regards,
Rajiv Kaicker

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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05 July 2010 Yes, Private Company is required to amend its Articles and inseert the amended clause.

DR GAURAV GUPTA FCA, FCS, LL.B

DR GAURAV GUPTA FCA, FCS, LL.B (Expert)
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05 July 2010 yes co. has to alter because now no private company can accept public deposit

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Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2010 A clarification is required in respect of deposits in a Private Company.Does the word relative mean a relative of Directors or Shareholders or both?