Whether a private company can accept deposits from HUF?
Vinita Nair | corplaw@vinodkothari.com
Provisions of Law
According to Section 2(31) of the Companies Act, 2013 ‘Deposit’ includes any receipt of money by way of deposit or 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. The exclusions are cited in Rule 2 (1) (c) of Companies (Acceptance of Deposits) Rules, 2014 which are applicable to public and private companies.
Rule 2 (1) (c) (viii) of Deposit rules excludes amounts 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 person declares that the amount is his own fund and not borrowed. The private company is required to disclose the details of money so accepted in the Board’s report.
Read more →