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Question
Justify the following statement
There is a limit or restriction on the amount that a company can collect as Deposits.
Solution
Justification:
(1) A private company can accept deposits from its members not exceeding 100% of the aggregate of the paid-up share capital and free reserves.
(2) A Public Company can accept deposits up to 25% of the aggregate of paid-up capital, free reserves and securities premium account.
(3) An Eligible company can accept deposits up to 25% of paid-up capital, free reserves, and securities premium account from public. In addition, it can accept deposits up to 10% of the aggregate of paid-up share capital, free reserves, and securities premium account from members.
(4) A Government company is eligible to accept deposits under section 76 of the Companies Act, 2013. It can accept deposits up to 35% of paid-up capital, free reserves, and securities premium account from the public. Thus, it is rightly justified that, there is a limit or restriction on the amount that a company can collect as deposits.
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