May 20266(a)5 marksNew Scheme
(a)ABC Ltd. is an eligible company to accept deposits. It had accepted a fixed deposit of ₹ 5,00,000 from Mr. R on 1st April, 2022 for a period of 36 months at an interest rate of 9% per annum. On 30th November, 2024, after the expiry of six months from the date of deposit but before the date of maturity, Mr. R requested premature repayment of the deposit.
ABC Ltd. agreed to repay the deposit on the same date. The deposit rate of interest offered by the company for 12 months is 7%, for 24 months 8% and 36 months is 9% respectively.
Referring to the applicable provisions of the Companies Act and Companies (Acceptance of Deposits) Rules, 2014 regarding premature payment of deposits, you are required to answer the following:
(i)Calculate the period of deposit and the rate of interest payable to Mr. R.
(ii)State the situations where the reduction of rate of interest is not applicable even if the deposit is prematurely repaid. (5 Marks)
(a)(i) Section 76 of the Companies Act, 2013 and Rule 15 of the Companies (Acceptance of Deposits) Rules, 2014 deal with acceptance of deposits from public by eligible companies.
Premature Repayment of Deposits (for eligible companies): Where a company makes a repayment of deposits, on the request of the depositor, after the expiry of a period of six months from the date of such deposit but before the expiry of the period for which such deposit was accepted, the rate of interest payable on such deposit shall be reduced by one per cent. from the rate which the company would have paid had the deposit been accepted for the period for which such deposit had actually run and the company shall not pay interest at any rate higher than the rate so reduced.
As per the Explanation given under the said rule- For the purposes of this rule, where the period for which the deposit had run contains any part of a year, then, if such part is less than six months, it shall be excluded and if such part is six months or more, it shall be reckoned as one year.
In the situation given in the question: Original deposit tenure = 3 years;
Contracted rate = 9% (for 3 years);
Actual period run = 2 years 8 months.
As per the explanation provided in the Rule, if the actual period contains a fraction of a year, the period will be determined as below:
1.For less than 6 months → The full year is to be ignored ignoring the part of the year: and
2.For 6 months or more → To be count as one full year.
So, 2 years 8 months to be count as 3 years.
Therefore, while calculating the rate of interest payable, the “actual run period” will be considered as 3 years and contract rate applicable for 3 years (and not for 2 years) will be: 9% (same as original scheme) Less penalty for premature reduction 1% = 8%.
Hence, for the period of deposit is 32 months the rate of interest payable to Mr. R would be 8%.
(ii)Reduction of rate of interest is not applicable in the following cases:
(a)Where the deposit is prematurely repaid to comply with Rule 3 i.e. premature repayment made in order to reduce the total amount of deposits to bring it within the permissible limits; or
(b)Where the deposit is prematurely repaid to provide for war risk or other related benefits to the personnel of naval, military or air forces or to their families during the period of emergency declared under Article 352 of the Constitution.
Source: ICAI Suggested Answers, May 2026, 6(a) (New Scheme).
January 20262(b)5 marksNew Scheme
(b)PRT Ltd. is an eligible public company. The following details are available from its audited balance sheet as on 31st March 2024: ,
•Paid-up Share Capital: ₹ 20 crore
•Free Reserves: ₹ 8 crore
•Securities Premium Account: ₹ 2 crore
•Existing deposits from members: ₹ 2 crore
•Existing deposits from public (excluding members): ₹ 5 crore
The company now proposes to accept further deposits during the year 2024-25:
(1)₹ 3 crore from its members; and
(2)₹ 2 crore from persons other than members (general public).
You are required to examine, with reference to the relevant provisions of the Companies Act, 2013, whether the above proposal is valid. If not, calculate the maximum permissible deposits in each category. (5 Marks)
(b)As per section 76 read with Rule 3 of the Companies (Acceptance of Deposits) Rules, 2014, an eligible company is permitted to accept or renew deposits as under:
•From its Members : The amount of such deposit together with
outstanding deposits from the members as on the date of acceptance or renewal can be maximum 10% of the aggregate of its paid-up share capital, free reserves and securities premium account.
•From Persons other than its Members : The amount of such
deposits together with the amount of outstanding deposits (excluding deposits from members) on the date of acceptance or renewal can be 25% of the aggregate of its paid-up share capital, free reserves and securities premium account.
Calculation Basis
Aggregate of paid-up share capital ( ₹ 20 crore), free reserves ( ₹ 8 crore), and securities premium ( ₹ 2 crore), totals ₹ 30 crore.
Maximum Permissible Limit
| Category | Maximum Limit | Exiting deposits | Proposed deposits | | Maximum | |
| | | | | further | |
| | | | | permissible | |
| | | | | deposits still | |
| | | | | allowable | |
| From Members | 10% of ₹ 30 crore = ₹ 3 crore | ₹ 2 crore | ₹ 3 crore | ₹ 1 crore | | |
| From Public | | | | 25% of ₹ 30 ₹ 5 crore | ₹ 2 crore | ₹ 2.5 crore |
crore = ₹ 7.5
crore
In view of the above, the company’s proposal to accept ₹ 3 crore from members is incorrect and ₹ 2 crore from persons other than members
(general public) is correct.
Source: ICAI Suggested Answers, January 2026, 2(b) (New Scheme).
September 20256(a)5 marksNew Scheme
(a)Referring the provisions for acceptance of deposits as laid under the Companies Act, 2013 and the relevant rules, define the term 'deposit' and examine the validity of each of the following proposals:
(i)SK Textiles Limited wants to accept deposits of ₹ 1 crore from its members for a tenure which is less than six months.
(ii)S, one of the directors of ATC Technologies Private Limited, a start-up company, requested K, one of his close friends to lend to the company 50 lakh in a single tranche by way of a convertible note repayable within a period of six years from the date of its issue. (5 Marks)
(a)Definition of Deposit: According to section 2(31) of the Companies Act, 2013, the term 'deposit' includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve bank of India.
(i)According to Rule 3(1) of the Companies (Acceptance of Deposits) Rules, 2014, a company is not permitted to accept or renew deposits (whether secured or unsecured) which is repayable on demand or in less than six months. Further, the maximum period of acceptance of deposit cannot exceed thirty-six months.
However, as an exception to this rule, for the purpose of meeting any of its short-term requirements of funds, a company is permitted to accept or renew deposits for repayment earlier than six months subject to the conditions that:
-such deposits shall not exceed ten per cent. of the aggregate of the paid-up share capital, free reserves and securities premium account of the company; and
-such deposits are repayable only on or after three months from the date of such deposits or renewal.
In the given case, SK Textiles Limited wants to accept deposits of ₹ 1 crore from its members for a tenure which is less than six months. It can do so if it justifies that the deposits are required for the purpose of meeting any of its short-term requirements of funds but in no case such deposits shall exceed 10% ten per cent of the aggregate of its paid-up share capital, free reserves and securities premium account and further, such deposits shall be repayable only on or after three months from the date of such deposits.
(ii)In terms of Rule 2 (1) (c) (xvii) of the Companies (Acceptance of Deposits) Rules, 2014, if a start-up company receives rupees twentyfive lakh or more by way of a convertible note (convertible into equity shares or repayable within a period not exceeding ten years from the date of issue) in a single tranche, from a person, it shall not be treated as deposit.
In the given case, ATC Technologies Private Limited, a start-up company, received ₹ 50 lakh from K in a single tranche by way of a convertible note which is repayable within a period of six years from the date of its issue. In view of Rule 2 (1) (c) (xvii) which requires a convertible note to be repayable within a period of ten years from the date of its issue, the amount of ₹ 50 lakh shall not be considered as deposit.
Source: ICAI Suggested Answers, September 2025, 6(a) (New Scheme).
May 20252(a)5 marksNew Scheme
(a)Referring to the provisions of the Companies Act, 2013, state whether the following amounts received by the company constitute deposit or not:
(i)IQ Books Limited received share application money of ₹ 50 crore from investors on 8th December, 2024. As the issue was under subscribed, the company refunded the amount to the investors on 20th February, 2025.
(ii)Suraj, Raj and Tejas are the promoters of Precious Jewellers Limited. They borrowed a sum of ₹ 200 crore from ABC Bank Limited for its working capital purpose. The Bank imposed a stipulation that the promoters should contribute at least 20% of the amount borrowed. Hence, Suraj brought in ₹ 10 crore, Raj brought in ₹ 15 crore and Mr. K, father of Tejas brought in ₹ 15 crore.
(iii)Pretty Cosmetics Limited issued non-convertible debentures for ₹ 125 crore and listed it on a recognized stock exchange adhering to SEBI rules and regulations. The company created a charge on its assets in favour of the debenture holders and duly registered the charge.
(5 Marks)
(a)(i) As per sub- clause vii of Rule 2 (1) (c) of Companies (Acceptance of Deposits) Rules, 2014:
(i)Any amount received and held towards subscription to any securities (including share application money or advance towards allotment of securities, pending allotment), so long as such amount is appropriated only against the amount due on allotment of the securities applied for.
It is clarified by way of Explanation that if the securities for which application money or advance for such securities was received cannot be allotted within 60 days from the date of receipt of the application money or advance for such securities and such application money or advance is not refunded to the subscribers within 15 days from the date of completion of 60 days, such amount shall be treated as a deposit under these rules.
In the light of the facts of the question and provisions of Law:
-IQ Books Limited received the share application money on 8th December, 2024 and refunded the same on 20th February, 2025.
Therefore, IQ Books Limited has kept the money for (24+31+19) 74 days with them which is less than (60 days + 15 days) 75 days to be considered the money as deposits.
Hence, 50 crore received by IQ Books Limited will not be considered as deposit as it was refunded within the prescribed time limit.
(ii)As per sub-clause (xiii) of Rule 2 (1) (c) of Companies (Acceptance of Deposits) Rules, 2014, any amount brought in by the promoters of the company by way of unsecured loan in pursuance of the stipulation of any lending financial institution or a bank subject to the fulfillment of following conditions:
(a)the loan is brought because of the stipulation imposed by the lending institutions on the promoters to contribute such finance;
(b)the loan is provided by the promoters themselves or by their relatives or by both; and
(c)such exemption shall be available only till the loans of financial institution or bank are repaid and not thereafter.
In the given question, the amount of 40 crore brought in by Suraj (Rs. 10 crore), Raj (Rs. 15 crore) and Tejas ( ₹ 15 crore through his father
Mr. K), will not be treated as deposit as this amount brought by the promoters of Precious Jewellers Limited fulfill all the conditions as prescribed by the Act.
(iii)As per sub-clause (ixa) of Rule 2(1)(c) of companies (Acceptance of Deposits) Rule, 2014, any amount raised by issue of non-convertible debenture not constituting a charge on the assets of the company and listed on a recognized stock exchange as per applicable regulations made by Securities and Exchange Board of India, will not be treated as deposit.
In the given question, the amount of ₹ 125 crore raised by Pretty
Cosmetics Limited will be treated as deposit as the company has created a charge on its assets in favour of the debenture holders.
Source: ICAI Suggested Answers, May 2025, 2(a) (New Scheme).
November 20224(b)4 marksOld Scheme
(b)Perfect Limited Company raised the secured deposit of ₹ 100 crores an 30th June, 2021 from the public on interest @ 12% p.a. repayable after 3 years. The charges has been created within prescribed time in favour of trustee of depositors against the deposit taking following assets of the company as security:
| Land & Building | ₹ 60 crores | |
| Plant & machinery | ₹ 20 crores | |
| Factory Shed | ₹ 20 crores | |
| Trade Mark | ₹ 20 crores | |
| Goodwill | ₹ 25 crores | |
| Explain the validity of the charges created with reference to the Companies (Acceptance of Deposit) Rules, 2014. | | (4 Marks) |
(b)As per second proviso to Section 76(1) of the Companies Act, 2013, every company which accepts secured deposits from the public shall within 30 days of such acceptance, create a charge on its assets. The amount of charge shall not be less than the amount of deposits accepted. The charge shall be created in favour of the deposit holders in accordance with the prescribed rules.
In respect of creation of security, Rule 6 of the Companies (Acceptance of Deposit) Rule, 2014, states that the company accepting secured deposits shall create security by way of charge on its tangible assets only.
The other notable points are:
•The company cannot create charge on intangible assets (i.e. goodwill, trade-marks, etc.).
•Total value of security should not be less than the amount of deposits accepted and interest payable thereon.
•The market value of assets subject to charge shall be assessed by a registered valuer.
•The security shall be created in favour of a trustee for the depositors on specific movable and immovable property of the company.
In the given question,
| Particulars | | Amount (in ₹) |
| Total value of security (value of assets on which charge can be created) | | 60+20+20 [Land and Building, Plant & machinery and Factory Shed] = 100 crore | |
| Total deposits accepted and interest payable thereon | | 100+ [(100*12%)*3 years] = 136 crore | |
Since, the total value of security is less than the amount of deposits accepted and interest payable thereon, hence the charge is not validly created.
Source: ICAI Suggested Answers, November 2022, 4(b) (Old Scheme).
May 20225(b) OR5 marksOld Scheme
| (b) (i) | Mr. Ram, a shareholder of PQR Ltd., has made a request to the company for |
| providing a copy of minutes book of general meeting. Whether the shareholder of a company is entitled to receive a copy of minutes book? Explain, provisions of the | |
| Companies Act, 2013. | (3 Marks) |
(ii)Explain the provision relating to 'Credit Rating' which an 'Eligible Company' should follow to raise public deposits as per the Companies Act, 2013. (2 Marks)
(b)(i) In line with section 119 read with Rule 26 of the Companies (Management and Administration) Rules, 2014, any member shall be entitled to be furnished, within seven working days after he has made a request in that behalf to the company, with a copy of any minutes of any general meeting, on payment of such sum as may be specified in the articles of association of the company.
As Mr. Ram, in the given case, is the shareholder of PQR Ltd., so shall be entitled to receive a copy of any minutes book of general meeting.
(ii)Obtaining of Credit Rating: The provisions relating to obtaining of ‘Credit Rating’ to be followed by an ‘eligible company’ are contained in Section 76 (1) of the Companies Act, 2013 read with Rule 3(8) of the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time.
Accordingly, an ‘eligible company’ which desires to r aise public deposits 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. The given rating which ensures adequate safety, shall be informed to the public at the time of invitation of deposits from the public. Further, the rating shall be obtained every year during the tenure of deposits.
Source: ICAI Suggested Answers, May 2022, 5(b) OR (Old Scheme).
May 20234(b)5 marksOld Scheme
(b)Mr. Raj is an employee of DSP Trading Pvt Ltd. As per his contract of employment, his annual salary is ₹ 5,00,000. Mr. Raj paid to the company ₹ 5,30,000 in the nature of noninterest bearing security deposit. Referring to the provisions of the Companies Act, 2013, define deposit and decide whether this amount received from Mr. Raj will be considered as deposit as per rule 2(1)(c)? (5 Marks)
(b)Deposit : According to section 2 (3 1) of the Companies Act, 2013, the term ‘deposit’ includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve bank of India.
Rule 2 (1) (c) of the Companies (Acceptance of Deposit) Rules, 2014 states various amounts received by a company which will not be considered as deposits. As per rule 2(1)(c)(x) any amount received from an employee of the company not exceeding his annual salary under a contract of employment with the company in the nature of noninterest-bearing security deposit is not considered as deposit.
In the instant case, ₹ 5,30,000 was received by DSP Trading Private Limited as a noninterest-bearing security deposit, from its employee, Mr. Raj, who draws an annual salary of ₹ 5,00,000 under a contract of employment.
Accordingly, amount of ₹ 5,30,000 received from Mr. Raj, will be considered as deposit in terms of sub-clause (x) of Rule 2 (1) (c) of the Act, as the amount received from Mr. Raj is more than his annual salary of ₹ 5,00,000.
Source: ICAI Suggested Answers, May 2023, 4(b) (Old Scheme).
September 20262(b)5 marksNew Scheme
(b)Renovations and Innovations Ltd. (RI Ltd.) received share application money of ₹ 60 Lakhs on 01-06-2025 but failed to allot shares within the prescribed time limit. The share application money of ₹ 5 Lakh received from Mr. Khanna, a customer of the company, was refunded by way of book adjustment towards the dues payable by him to the company on 30-07-2025.
The Company Secretary of RI Ltd. reported to the Board that ₹ 55 Lakhs shall be deemed to be 'Deposits' as on 31-07-2025 as it was not refunded within 30 days.
The Company is required to comply with the provisions of the Companies Act, 2013 applicable to acceptance of deposits in relation to this amount. You are required to examine:
(i)Whether reporting of Company Secretary regarding that ₹ 55 Lakhs will be deemed to deposit is correct?
(ii)Whether adjustment of ₹ 5 Lakhs towards the dues payable by Mr. Khanna will be treated as refund within prescribed time limit?
(5 Marks)
(b)According to Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014, the following category of receipt is not considered as deposit: Any amount received and held pursuant to an offer made in accordance with the provisions of the Companies Act, 2013 towards subscription to any securities, including share application money or advance towards allotment of securities, pending allotment, so long as such amount is appropriated only against the amount due on allotment of the securities applied for. It is clarified by way of Explanation that if the securities for which application money or advance for such securities was received cannot be allotted within 60 days from the date of receipt of the application money or advance for such, securities and such application money or advance is not refunded to the subscribers within 15 days from the date of completion of 60 days, such amount shall be treated as a deposit under these rules.
Further, it is clarified that any adjustment of amount for any other purpose shall not be treated as refund.
In the given question, RI Ltd. has received ₹ 60 Lakh as share application
money on 01.06.2025. It failed to allot shares within the prescribed limit. Further, on 30.07.2025 the company adjusted the amount of ₹ 5 Lakh
received from Mr. Khanna (a customer of the company), by way of book adjustment towards the dues payable by him to the company.
In the light of the facts of the question and provisions of Law:
(i)If such application money or advance is not refunded to the subscribers within 15 days from the date of completion of 60 days, such amount shall be treated as a deposit. In the question, the prescribed limit of 60 days will end on 31.07.2025 and the company has 15 more days to refund such application money to the subscribers. Otherwise, after lapse of such 15 days, the amount not so refunded will be treated as deposit.
Hence, the Company Secretary of RI Ltd. is not correct in treating the entire amount of ₹ 55 Lakh as 'Deposits' on 31.07.2025.
(ii)The amount of ₹ 5 Lakhs received from Mr. Khanna was adjusted by
way of book adjustment towards the dues payable by him to the company.
As per the Explanation to Rule 2(1)(c), any adjustment of the amount for any other purpose shall not be treated as refund.
Thus, the amount of ₹ 5 Lakh adjusted against payment due to be
received from Mr. Khanna, cannot be treated as refund.
Source: ICAI Suggested Answers, September 2026, 2(b) (New Scheme).