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Question
Justify the following statement:
There is a limit or restriction on the amount that a company can collect as deposits.
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Solution
- Private Company: A private company can accept deposits from its members up to 100% of the aggregate of its paid-up share capital, free reserves, and securities premium account.
- Public Company: A public company can accept deposits from its members up to 35% of the aggregate of its paid-up share capital, free reserves, and securities premium account.
- Eligible Company: An eligible public company (which meets the prescribed net worth and turnover conditions) can accept deposits from the public up to 25% of the aggregate of its paid-up share capital, free reserves, and securities premium account.
It can also accept deposits from its members up to 10% of the aggregate of its paid-up share capital, free reserves, and securities premium account. - Government Company: A government company can accept deposits up to 35% of the aggregate of its paid-up share capital, free reserves, and securities premium account.
Thus, there are specific limits and restrictions on the amount of deposits a company can collect to ensure financial stability, transparency, and protection of stakeholders’ interests.
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Answer in one sentence.
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Study the following case/situation and express your opinion.
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Study the following case/situation and express your opinion.
Apple Company Ltd. is an eligible Public Company. It plans to raise secured deposits from the public. Please advice its Board on the following.
Within what period should the company create a charge on it’s assets?
Study the following case/situation and express your opinion.
SUN Pvt. Ltd. company wants to raise funds through deposits.
Can the company accept deposits from the public?
State the amount of deposits that different types of companies can collect by way of deposits.
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