Thnks ashutosh, Just let me know the entities other than directors from whom PUBLIC COMPANY can accept loan amount. Pls tell me whether a public company can accept loan from private company or it will be considered as deposits or else it is also covered under exceptions ?? Thnx a ton.

As per rule 3(2) a company may accept deposits fro mteh public upto the following limis subject to fulfilment of the other conditions of the Companies (Acceptance of Deposit) Rules, 1975:

 

(a) upto 10% of its paidup capital and free reserves from its shareholders.

 

(b) upto 25% of the paid up capital and free reserves of the company from public.

 

Rule 3(2A) provides that in case of Government Company, upto 35% of the paid up capital and free reserves of the Government Company.

Originally posted by : CS Ankur Srivastava
	Definition of deposit given under Rule 2 wherein it is provided that deposit means any deposit of money with and includes any amount borrowed by a company, but does not include follwoing:   Under Rule 2(ix): deposit shall not include following   "Any amount received from a person who, at the time of receipt of the amount, was a director or a relative of a director, or member of a private company."

Dear Ankur Ji, Thanks so much for your guidance and help. I am really grateful to you. Pls appreciate my query is in respect of PUBLIC COMPANY not private company. Exception as mentioned by you is applicable for acceptance of money by a private limited company. Just let me know the entities other than directors from whom PUBLIC COMPANY can accept loan amount. Pls tell me whether a public company can accept loan from private company or it will be considered as deposits or else it is also covered under exceptions ?? Thnx a ton. Looking forward to hear from you soon!

Dear Neha,

 

First of all the above exemption is applicable for both private as well as public company read:

 

"Any amount received from a person who, at the time of receipt of the amount, was a director of the Company or a relative of a director, or member of a private company."

 

Any amount received from the directors of the Private or Public company shall be categorised as exempted deposit.

Dear Ankur Ji, Thanks so much. My interpretation was wrong for this provision. Now I am clear that a public company can accept money from directors and relatives of directors. It is exempt under the rules. Help me in one more doubt: Whether a public company can accept loan from private company or it will be considered as deposits or else it is also covered under exceptions ?? I await your expert reply on the same.

Under Rule 2(iv) any amount received by a company from any other company is also exempted deposit.

Dear Ankurji,

 

I am reproducing here point (ix) of Acceptance of Deposit Rules 1975:

 

(ix) any amount received by a private company from a person who, at the time of the receipt of the amount, was a director, relative of director or member:

 

Provided that the director or member, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting from others.

 

According to above point, only private company is exempt.

As per your suggestions, I have gone through the rules of acceptance of deposit in detail. I am attaching herewith copy of rules referred by me.

Pls correct me if I am wrong.

 

Await your reply.

 

 

Yes it is only for a Private Company. 

If we take a look for the Public Companies, only the amount received from directr is considered as an exempted deposit, rest all the amount will be considered as deposit. 

Also, whether it is a Private Company or a Public Limited declaration must be given. 

Declaration is necassary to avail the exemption. 

 

 

 

Originally posted by : Ashutosh
	If we take a look for the Public Companies, only the amount received from directr is considered as an exempted deposit, rest all the amount will be considered as deposit.  Also, whether it is a Private Company or a Public Limited declaration must be given.

 

Dear Anhutosh,

Pls quote where it is mentioned that :

 

1. for the Public Companies, only the amount received from directr is considered as an exempted deposit,

2. whether it is a Private Company or a Public Limited declaration must be given.