Section 73 of the Companies Act, 2013
Section 73 of the Companies Act, 2013 deals with the acceptance of deposits by companies from the public and members.
✅ Section 73 – Prohibition on Acceptance of Deposits from Public
1. General Prohibition:
A company cannot accept deposits from the public except as provided under Chapter V of the Companies Act, 2013 (which includes Sections 73 to 76A).
2. Acceptance from Members:
A company may accept deposits from its members (i.e., shareholders), subject to the following conditions:
(a) Resolution:
A resolution must be passed in a general meeting of the company.
(b) Issuance of Circular:
The company must issue a circular to its members containing:
Financial position
Credit rating
Total number of depositors
Amount due toward previous deposits
Any other prescribed particulars
(c) Filing with ROC:
A copy of the circular must be filed with the Registrar of Companies (ROC) at least 30 days before the issue.
(d) Deposit Repayment Reserve Account:
The company must deposit at least 20% of the amount of deposits maturing during the following financial year in a separate bank account called the Deposit Repayment Reserve Account.
(e) Certification of No Default:
The company must certify that it has not defaulted in repayment of deposits or interest.
(f) Deposit Insurance (if applicable)
3. Penalty for Contravention:
If a company accepts or invites deposits in violation of this section:
The company and its officers may face heavy penalties, including fines and imprisonment.
Depositors can approach NCLT (Tribunal) for repayment.
🚫 Exceptions – Who Can Accept Public Deposits:
Banking companies
NBFCs (regulated by RBI)
Other specified companies (as per rules and exemptions notified by the government)
🎯 Objective of Section 73:
To protect investors and ensure that companies do not misuse public funds or collect deposits without adequate financial discipline.
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