Acceptance of Deposits- Sec 73 Loans to Directors - Sec 185

1. Acceptance of Deposits & Loans To Directors
under Companies Act, 2013
-Goutham Kini

2. Acceptance of Deposits – Sec 73
Applicability
1. Remaining all other companies are required to follow the rules and
regulations prescribed under this Section.
2. Can accept deposits only if
Resolution Passed in
General Meeting
Subject To Such Rules
Agreement between
Company and its
Members
Banking
Co.
Non
Banking
Financial
Co.
Such Other
Co.
Housing
Co.

3. Issuance of Circular
Filing a copy with ROC
Deposit in a bank account of Scheduled Bank
Deposit Insurance
Declaration
Providing Security
Conditions to be satisfied
Where a company does not secure the deposits or secures such deposits partially, then the
deposits shall be termed as “unsecured deposits” and shall be so quoted in every circular,
form, advertisement or in any document related to invitation or acceptance of deposits.

4. Repayment of
Deposit
Along with
Interest
Terms and
Conditions of
the Agreement
Failure to Repay
Apply to
Tribunal
Application of
Deposit Repayment
Reserve Account
No other
purpose
Some More Provisions

5. Consequences of Contravention of Sec 73
Failing to repay the deposit or part thereof or any interest due within the
time specified:
Company
Fine- Min Rs.
1 Crore
Max- Rs. 10
Crores
Responsible
officer
Imprisonment
Upto 7 years
Fine- Min Rs.
25 Lakhs
Max- Rs. 2
Crores
Provided that if it is proved that the officer of the company who is in default,
has contravened such provisions knowingly or wilfully with the intention to
deceive the company or its shareholders or depositors or creditors or tax
authorities, he shall be liable for action under section 447.

6. Loans To Directors, etc - Sec 185
Applicability
All Companies
• Directors
• Any other person in which the director is interested
Non- Applicability
Managing or Whole Time Director
• Extended to all employees
• Scheme approved by the members by a special
resolution
Ordinary Course of Business
• Interest rate not less than Bank Rate

7. Any
Director
• Of Lending Co, Holding Co.
• Partner or Relative of any such Director
Any Firm
• In which any such director or relative is a partner.
Any Private
Company
• In which any such director or relative is a director or member.
Any Body
Corporate
• Not less than 25% of the total voting power maybe exercised or controlled
by any such director, or by two or more such directors together.
Any Body
Corporate
• Accustomed to act in accordance with the directions
“To any other person in whom director is interested” means

8. Consequences of Contravention of Sec 185
Company
Directors or any other
person
• Fine-Minimum Rs. 5 lakhs
• Max Rs. 25 lakhs
• Imprisonment upto 6 months
• Fine- Min Rs. 5 lakhs
• Max- Rs. 25 lakhs

9. Thank You…