Sumiti Jain (FP) (1364 Points)
23 September 2013If a Pvt. Ltd. co. deals in Immigration business. A person who has to send his son abroad deposits amount in company's bank a/c but for some reason deal with that person is cancelled and co. returned the money deposited in the bank.
Can such acceptance & return back of money be considered as Unsecured loan?
Can a PVT. ltd. co. do so?
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 23 September 2013
Rule 2(b)(vi) of Companies (Acceptance of Deposits) Rules 1975 excludes from the definition of deposit:
| (vi) | any amount received by way of security or as an advance from any purchasing agent, selling agent, or other agents in the course of, or for the purposes of, the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service; |
If you are able to justify that the amount had been received as advance against rendering of service, it will not be covered under the definition of 'deposit' u/s 58A of Companies Act 1956.
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