Board of Director to decide the forfeiture or refund of the deposit in certain cases

Board of Direc­tor to decide the for­fei­ture or refund of the deposit under sec­tion 160 of the Com­pa­nies Act, 2013 in cer­tain cas­es. After a clar­i­fi­ca­tion sought by the com­pa­nies reg­is­tered under Sec­tion 8 of the Com­pa­nies Act, 2013 (cor­re­spond­ing to sec­tion 25 of Com­pa­nies Act, 1956) about the man­ner in which the amount of deposit of rupees one lakh received by them under sub-sec­tion (1) of sec­tion 160 of the Com­pa­nies Act, 2013 (Act) is to be han­dled if the depos­i­tor fails to secure more than twen­ty five per cent of the total valid votes, the Min­istry on Octo­ber 14, 2014 clar­i­fied via cir­cu­lar No 38/2014 that as the rel­e­vant pro­vi­sion is silent on such issue, the Board of direc­tors of a sec­tion 8 com­pa­ny is to decide as to whether the deposit made by or on behalf of the per­son fail­ing to secure more than twen­ty-five per­cent of the valid votes is to be for­feit­ed or refunded.

Gen­er­al_­Cir­cu­lar_38-2014