Accepting Public Deposits: The Compliance Sequence

ROCEDURE FOR ACCEPTING DEPOSITS FROM PUBLIC Only eligible Public companies can accept deposits from public. Following is the procedure to be followed for accepting deposits from the public : 1. Hold Board Meeting : Board meeting is held to pass a resolution to accept deposits from public. The details of amount of deposit, terms and conditions of issue, etc. are decided in this meeting. Also the date and time to hold a general meeting of the shareholders to get their approval for collecting deposits iS decided in this Board Meeting, 2. Hold a General Meeting : Company holds a General Meeting of the shareholders to seek their approval for accepting deposits. A Special resolution is passed and it has to be filed with the Registrar of Companies and if needed with RBI also, 3. Hold Board Meeting : Board meeting is held to approve the draft advertisement. All necessary information as needed under the Act should be included in the advertisement, The draft should be signed by majority of Directors of the company. 4. Appoint Banker : Company has to appoint a banker where the applicants will be submitting their application form along with deposit money. 5. Obtain Credit Rating : Company has to obtain a credit rating from a recognized Credit Rating Agency. This rating should be mentioned in the advertisement. 6. Appoint Deposit Trustee : Company has to appoint one or more Deposit Trustees, The Deposit Trust deed contains the terms and conditions agreed upon or between the company and the Trustee. The deed has to be signed at least 7 days before issuing the advertisement. 7. Take Deposit Insurance : Company enters into an agreement with the Insurance Company for taking Deposit Insurance. The agreement should be signed at least 30 days before issuing the advertisement. 8. File a copy of advertisement with Registrar of companies : A copy of the advertisement has to be filed with the Registrar of Companies. 30 days after filing it with the Registrar the company can publish the advertisement. 9. Advertisement to the public : Company has to issue the advertisement after 30 days of filling it with the Registrar of Companies. The advertisement has to be published in one English newspaper and one vernacular newspaper having wide circulation in the state where the company's registered office is located. 10. Upload the advertisement on the company's website : After releasing the advertisement to the public, it has to be uploaded on the company's website. 11. Collect application form and money E Company informs the banker to collect the application forms along with the deposit money. 12. Issue Deposit Receipt : Company has to issue Deposit Receipt within 21 days from the date of receipt of money or realization of cheque 13. Create charge on assets : Company issuing secured deposits has to create a charge on its assets within 30 days of acceptance of deposit 14. Make entries in Register of Deposits : Within seven days from the date of issue of Deposit Receipts, Secretary has to enter the details of deposits collected in the Register of Deposits. The entries have to be verified by authorized officer. 15. File Return of Deposits with Registrar of Companies : Company has to file a Return on Deposit before 30" June every year. The return has details of Deposits with company as on 31st March.