Question

Study the following case/situation and express your opinion:

ABC Limited a registered company has a clause of accepting deposits from the General Public in a Memorandum of association.

1. Management has not passed a resolution in the board meeting for accepting deposits.
2. Shareholder has not accepted the resolution and still company receives a deposit from general public.

Answer 1

1. For accepting public deposits, management should pass a resolution in the Board Meeting regarding the quantum of deposits. And once approved by the management, the same can be placed before the shareholder.
2. Shareholder has not accepted the proposal but still management decides to take a deposit from the Public which is itself a contravention to the act. Hence, management should not accept the deposits from the general public.