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Question
Justify the following statement.
Companies have to create a charge on their tangible assets while issuing secured deposits.
Solution
Justification:
- Every company accepting deposits from the public shall create a charge on its tangible assets of an amount not less than the number of deposits accepted in favour of the deposit holders in accordance with such rules as may be prescribed.
- The charge should be created within 30 days of accepting the deposits.
- The minimum amount of security should be equal to the amount not covered by Deposits Insurance. The security is created in favour of the Deposit Trustee.
- Thus, it is rightly justified that, companies have to create a charge on tangible assets while issuing secured deposits.
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Answer in brief.
State the contents of circular or Advertisement for Deposit
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Justify the following statement.
Company has to fulfill certain provisions related to issue of circular or advertisement.
