Sec. 73 to 76 of the Companies Act, 2013 (CA13) & related rules govern provisions regarding acceptance of deposits by companies. I have prepared a note on procedure for acceptance of deposits from members which might prove useful to you. Except giving definition of eligible company, I have avoided explaining provisions of the sections and directly a general procedure is given below.
Eligible Company:- A public company having net worth of not less than Rs. 100 Crores or turnover of not less than Rs. 500 Crores AND which has obtained the prior consent of the members in a general meeting by means of special resolution AND also filed the special resolution with the Registrar of Companies before making any invitation to the public for acceptance of deposits.
Eligible company, which is accepting deposits within the limit specified under section 180(1)(c) may accept deposits by means of an ordinary resolution.
PROCEDURE FOR ACCEPTANCE OF DEPOSITS FROM MEMBERS :-
1. Convene a Board meeting to consider & approve the business to propose & accept deposits from members & decide the day, date, time & place of general meeting.
2. Issue notice of general meeting to the members of the company.
3. Hold the general meeting & pass resolution for acceptance of deposits.
4. Submit form MGT-14 within 30 days of passing resolution.
5. Comply with the Rules prescribed & terms & conditions mutually agreed by the Company & deposit holders either for acceptance or for repayment of deposits.
No deposit can be accepted/renewed which is repayable within period of less than 6 months or more than 36 months from date of acceptance/renewal. [Exception :- deposits can be accepted to be repayable not earlier than months (& upto 6 months) if such deposits do not exceed 10% of paid up capital + free reserves.]
6. File the copy of circular in the Form DPT-1 along with such statement with the Registrar within thirty days before the date of issue of circular.
7. Enter into a contract providing for deposit insurance at least thirty days before the issue of circular or advertisement for an amount covering minimum twenty thousand rupees for each deposit.
However, Companies may accept the deposits without deposit insurance contract till 31st March, 2015.
8. Appoint trustee before issue of circular or advertisement.
9. Execute trust deed in form DPT 2 atleast 7 days before issue of circular or advertisement.
10. After the expiry of 30 days of filing Form DPT-1, the circular in Form DPT-1 along with application form is sent to all members by registered post with acknowledgement due / speed post / electronic mail.
11. The circular shall be published at least once in English language in a leading English newspaper & in vernacular language in a vernacular newspaper having wide circulation in the State in which the registered office of the company is situated.
12. Upload copy of circular on Company’s website.
13. In case, a company does not secure the deposits or secures such deposit partially, then, the deposits shall be termed as “unsecured deposits” & shall be so quoted in every circular, form, advertisement or in any document related to invitation or acceptance of deposits.
14. Eligible companies & co.s u/s 73 shall create charge as per rule 6. Eligible company inviting secured deposits shall provide for security by way of a charge on its assets for the due repayment of the amount of deposit & interest thereon. The company shall submit Form CHG-1 with Registrar for assets other than intangible assets & for an amount which shall not be less than the amount remaining unsecured by the deposit insurance.
Secured deposits including interest thereon can in no case exceed the market value of the charged assets assessed by the registered valuer.
15. Collect duly signed application form along with money from the members.
16. Issue receipts of deposits within 21 days of the receipts of money/realisation of cheque.
17. Maintain a register of deposits at its registered office which shall contain the details as prescribed the rules from the date of such acceptance.
18. Pay interest as per the rate proposed on agreed terms.
19. Open a separate bank account called deposit repayment reserve account.
20. Deposit in it atleast 15% of the amount of deposits maturing during the financial year & the financial year next following. Amount is to be deposited before 30th April every year.
21. Submit return of deposits in Form DPT-3 on or before 30th June each year for information as on 31st March of respective year.