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

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