The following information as per latest balance sheet figures as on 31st March, 2019 is made available to you: Paid-up Share Capital ₹ 150 crore Free Reserves ₹ 50 crore Securities Premium Account ₹ 20 crore Capital Rede
CS Executive · Company Law · PYQS · December 2020
The following information as per latest balance sheet figures as on 31st March, 2019 is made available to you: Paid-up Share Capital ₹ 150 crore Free Reserves ₹ 50 crore Securities Premium Account ₹ 20 crore Capital Redemption Reserve ₹ 10 crore The company has not accepted any deposits as of now. The Board of Directors want to know what is the maximum amount it can accept by way of deposits from (i) members and (ii) the public. Advise them.
Answer & Explanation:
As per Rule 3(4) of the Companies (Acceptance of Deposits) Rules, 2014, no eligible company can accept or renew- 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 10% of the aggregate of the paid-up share capital, free reserves and securities premium account of the company; 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 25% of aggregate of the paid-up share capital, free reserves and securities premium account of the company. In the instant case, as the net-worth of the company is exceeding ₹100 crore, so the company is assumed to be an eligible company. Further, aggregate of the paid-up share capital, free reserves and securities premium account is (₹150 crore + ₹50 crore + ₹20 crore) = ₹220 crores and the company has not accepted any deposits as of now. Accordingly, from the members, the eligible company can accept upto 10% of ₹220 crores i.e. ₹22 crores . From the public it can accept upto 25% of ₹220 crores i.e. ₹55 crores .
Topics: Acceptance of Deposits
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