The Board of Directors (BOD) of ABC Ltd., is planning to invite deposits from public for the purpose of meeting its short-term requirements of ₹20 crore in its scheduled meeting to be held on 1 st October, 2023. Deposits

As per section 73 of the Companies Act, 2013 read with proviso to rule 3 of the Companies (Acceptances of Deposits) Rules, 2014, a company may, for the purpose of meeting any of its short-term requirements of funds, accept or renew such deposits for the repayment earlier than six months from the date of deposit or renewal, as the case may be, subject to the condition that- Such deposits shall not exceed ten percent of aggregate of the paid-up share capital, free reserves and securities premium account of the company, and Such deposits are repayable not earlier than three months from date of such deposit or renewal thereof. BOD of ABC Ltd., is planning to invite deposits of ₹20 crore which is not more than ₹60 crore (10% of i.e., ₹600 crore) and repayment period is not earlier than three months from the date of such deposits. Proposal of BOD of ABC Ltd., does not contravene any provision of the Companies Act, 2023. BOD of ABC Ltd., may accept the deposits of ₹20 crore. The contentions of Company Secretary of ABC Ltd., is not correct. Accordingly, BOD of ABC Ltd. may be advised.