Acceptance of Interest free deposits

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Kavitha (Querist)
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13 January 2010 Can an unlisted Public Limited Company accept deposit from its directors without interest? what are the requirements to be complied with in case if it is accepting deposit with or without interest?

Sudhindra

Sudhindra (Expert)
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14 January 2010 A private company can accept deposits from its directors under the provisions of section 58 A of the companies act which layes down the rules for he acceptance in case of private placements by a private company or an unlisted company from its directors, however it has to be ensured that the same should be within the powers of the artilces of association and memorandum of association, otherwise it would tantamount to ultra virus the provisions of the comapnies act 1856.

Such placements are called private placements. Pls go thru the section in details for detailed explanation and understanding. Section 58A