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Study the following case/situation and express your opinion.SUN Pvt. Ltd. company wants to raise funds through deposits.What is the maximum period for which they can accept deposits? - Secretarial Practice

Answer in Brief

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

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Solution

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 :
A) 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 rtain 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.

B) 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
C) Eligible Public Company :
- An 'Eligible Company', i.e. 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 ic.
- In addition, it can accept deposits up to 10% of the egate of paid-up share capital, free reserves and securities premium account from members Rule 3(4) of Companies (Acceptance of Deposits) Rules, 2014.
(d) 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 ic.

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