Amounts received by private companies from their members, directors or their relatives before 1st April, 2014 would not considered as Deposit

Gen­er­al Cir­cu­lar No. 05/2015 Dat­ed: 30th March, 2015

Sub­ject:   Amounts received by pri­vate com­pa­nies from their mem­bers,  direc­tors or their rel­a­tives before 1^st  April, 2014 — Clar­i­fi­ca­tion  regard­ing applic­a­bil­i­ty of Com­pa­nies (Accep­tance of Deposits)   Rules, 2014

Stake­hold­ers have sought clar­i­fi­ca­tions as to whether amounts received by pri­vate com­pa­nies from their mem­bers, direc­tors or their rel­a­tives pri­or to 1^st April, 2014 shall be con­sid­ered as deposits under the Com­pa­nies Act, 2013 as such amounts were not treat­ed as ‘deposits’ under sec­tion 58A of the Com­pa­nies Act, 1956 and rules made thereunder.

2. The mat­ter has been exam­ined in con­sul­ta­tion with RBI and it is clar­i­fied that such amounts received by pri­vate com­pa­nies pri­or to 1^st, April,  2014 shall not be treat­ed as ‘deposits’ under the Com­pa­nies Act,  2013 and Com­pa­nies (Accep­tance of Deposits) Rules, 2014 sub­ject to the con­di­tion that rel­e­vant pri­vate com­pa­ny shall dis­close, in the notes to its finan­cial state­ment for the finan­cial year com­menc­ing on or after 1^st  April, 2014 the fig­ure of such amounts and the account­ing head in which such amounts have been shown in the finan­cial statement.

3. Any renew­al or accep­tance of fresh deposits on or after 1^st April, 2014 shall, how­ev­er, be in accor­dance with the pro­vi­sions of Com­pa­nies Act,  2013 and rules made thereunder.

4. This issues with the approval of the com­pe­tent authority.