MCA vide notification dated September 15, 2015 has amended the Companies (Acceptance of Deposits) Rules 2014. The details of the amendment is outlined below:

Substitution in rule 2

In rule 2, in sub-rule (1), in clause (c), for sub-clause (viii), the following shall be substituted, namely:-

"(viii) any amount received from a person who, at the time of the receipt of the amount, was 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, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board's report;".

Existing rule 2(1)(c)(viii) is reproduced below:

“(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company:

Provided that the director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others;”

Please take note that under the erstwhile Companies Act 1956, amount accepted by a private company from the relative of directors of its director was exempted from the purview of deposits but the Companies Act 2013 has withdrawn the said exemption and this become a real problem area for private companies in getting funds. The Government has taken note of Industry’s problem and has accordingly restored the exemption.

Amendment in rule 3

In rule 3, for the words "paid-up share capital and free reserves", wherever they occur, the words "paid-up share capital, free reserves and securities premium account shall be substituted;

Relevant text of existing rule 3 is reproduced below:

(1)……

3) No company referred to in sub-section (2) of section 73 shall accept or renew any deposit from its members, if the amount of such deposits together with the amount of other deposits outstanding as on the date of acceptance or renewal of such deposits exceeds twenty five per cent. of the aggregate of the paid-up share capital and free reserves of the company.

(4) No eligible company shall accept or renew-

(a) any deposit from its members, if the amount of such deposit together with the amount of deposits outstanding as on the date of acceptance or renewal of such deposits from members exceeds ten per cent. of the aggregate of the paid-up share capital and free reserves of the company;

(b) any other deposit, if the amount of such deposit together with the amount of such other deposits, other than the deposit referred to in clause (a), outstanding on the date of acceptance or renewal exceeds twenty-five per cent. of aggregate of the paid-up share capital and free reserves of the company.

(5) No Government company eligible to accept deposits under section 76 shall accept or renew any deposit, if the amount of such deposits together with the amount of other deposits outstanding as on the date of acceptance or renewal exceeds thirty five per cent. of the aggregate of its paid up share capital and free reserves of the company.
………..”

Amendment in Rule 8

In sub-rule (8), in the Table, for item (e) and entries relating thereto the following shall be substituted, namely:-

Table in rule 8 provides the list of credit rating agencies, whose credit rating will be accepted for the purpose of acceptance of deposits.