What is a deposit?
Any receipt of money by way of deposit or loan or in any other form by a company shall be deemed as deposit but does not include the amounts specified under Rule 2 (1) (c) of the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.
There is a prohibition on acceptance of deposits by a company except as provided under Chapter V of the Companies Act, 2013.
The Ministry of Corporate Affairs has amended the Companies (Acceptance of Deposits) Rules, 2014, vide the Companies (Acceptance of Deposits) Second Amendment Rules, 2015, which shall be effective from the date of their publication in the official gazette.
Before Latest amendment:-
A private company and public company were allowed to receive loan(s) from its director(s) provided that the director gives an undertaking to the company that the loan given is from own funds and not from borrowed money.
After amendment anaylsis:-
Only a private company is allowed to receive loan(s) from its director(s) or relative(s) of director provided that director or relative of such director gives an undertaking to the company that the loan given is from own funds and not from borrowed money.
Note:-
Any amount received from the director or relative of director by a public company shall be deemed as deposit and punishable under the provisions of Section 76A of the Companies Act, 2013.
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