Question

State the amount of deposits that different types of companies can collect by way of deposits.

Answer 1

Deposits are a source of short-term funds for the company. Deposits can be accepted by the company from public, directors or its members. It is a loan taken by the company and there are various terms and conditions that a company need to follow to accept them.

The amount of deposits that different types of companies can collect by way of deposits is as follows:

1. Amount of Deposit:
   1. Private Company: A Private Company can accept deposits from its members or Directors or Relatives of Directors not more than 100 percent of its aggregate of paid-up share capital and free reserves.
      However, a reserve class of Private Companies as specified by the Companies Act can accept deposits more than 100 percent of its aggregate of paid-up share capital and free reserves.
2. Public Company (other than Eligible Company): These Companies cannot accept fresh deposit from members if the amount of such deposits together with the previous deposits exceeds 25% of the aggregate of the paid up share capital and free reserves of the company
3. Eligible Public Company: An 'Eligible Company', i.e., a company eligible to accept deposits from public under Section 76(1) of Companies Act, 2013, can accept deposits up to 25% of paid-up capital, free reserves, and securities premium account from the public.
   In addition, it can accept deposits up to 10% of the aggregate of paid-up share capital, free reserves, and securities premium account from members Rule 3(4) of Companies (Acceptance of Deposits) Rules, 2014.
4. Government Company: A Government company is eligible to accept deposits under Section 76 of Companies Act, 2013. It can accept deposits up to 35% of paid-up capital, free reserves and securities premium account From the public.