Deposits has been vital source of funding for companies in India. Initially only public companies were allowed to accept deposits, but later through various amendments, Private Limited Companies can now accept deposits from its members with minimum regulatory compliance.Section 2(31) of Companies Act, 2013,”deposit” includes any receipt of money by way of depositor loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India.
If the securities, for which application money was received, can’t be allotted within 60 days from the date of receipt of the application money, such application money is to be refunded to the subscribers within 15 days from the date of completion of 60 days. If not refunded, such amount shall be treated as a deposit under these rules.viii. Any amount received from a director of the company or a relative of the director of the Private company: Provided that the director of the company or relative of the director of the private company furnishes to the company at the time of giving the money, a declaration in writing that the amount is not borrowed money.
But if the company is accepting deposits within the limit of Section 180(1)(c) i.e. if the total borrowing of the Company doesn’t exceed aggregate of its paid-up share capital, free reserves and securities premium account, then the consent of shareholders through Ordinary Resolution is sufficient.