Amended and updated notes on section 76 of Companies Act 2013. Detail discussion on provisions and rules related to acceptance of deposits from public by certain companies.
Chapter V (Sections 73–76A) of the Companies Act, 2013 (CA 2013) deals with the provisions related to acceptance of deposits by companies. Section 76 of CA 2013 provides for acceptance of deposits from public by certain companies.
Recently, we have discussed in detail section 75 (Damages for fraud) of CA 2013. Today, we learn the provisions of section 76 of Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
Section 76 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 902(E) issued dated 27.03.2014. This notification was come into force from 1st April, 2014 i.e. the commencement date of section 76 is 1-4-2014.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | V |
| Chapter Name | Acceptance of deposits by Companies |
| Section No. | 76 |
| Section Name | Acceptance of deposits from public by certain companies |
| Monthly Updated Edition | Company Law PDF |
Section 76 of Companies Act 2013: Acceptance of deposits from public by certain companies
Section 76 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014.
(1) Notwithstanding anything contained in section 73, a public company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to compliance with the requirements provided in sub-section (2) of section 73 and subject to such rules as the Central Government may, in consultation with the Reserve Bank of India, prescribe:
Such net worth or turnover has been defined in Explanation of Rule 2(1) of the Companies (Acceptance of Deposits) Rules, 2014.
Provided that such a company shall be required to obtain the rating (including its net worth, liquidity and ability to pay its deposits on due date) from a recognised credit rating agency for informing the public the rating given to the company at the time of invitation of deposits from the public which ensures adequate safety and the rating shall be obtained for every year during the tenure of deposits:
Provided further that every company accepting secured deposits from the public shall within thirty days of such acceptance, create a charge on its assets of an amount not less than the amount of deposits accepted in favour of the deposit holders in accordance with such rules as may be prescribed.
(2) The provisions of this Chapter shall, mutatis mutandis, apply to the acceptance of deposits from public under this section.