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FAQs on PPT: Acceptance of Deposits by Companies - Corporate & Other Laws for CA Intermediate

1. Can a company accept deposits from the public?
Ans. Yes, a company can accept deposits from the public subject to compliance with the rules and regulations prescribed by the Companies Act.
2. What are the conditions for a company to accept deposits from the public?
Ans. A company must obtain prior approval from its members through a special resolution, comply with the rules specified by the Reserve Bank of India, and follow the guidelines set by the Ministry of Corporate Affairs to accept deposits from the public.
3. Is there a limit on the amount of deposits that a company can accept from the public?
Ans. Yes, a company cannot accept deposits exceeding 25% of its aggregate of paid-up share capital and free reserves. Any amount received in excess of this limit will be treated as a deposit and subject to penalties.
4. What are the consequences of non-compliance with the regulations for accepting deposits by companies?
Ans. Non-compliance with the regulations for accepting deposits by companies can lead to penalties, fines, and even imprisonment for the company's directors. It can also damage the company's reputation and financial stability.
5. Can a company repay deposits before the maturity date?
Ans. Yes, a company can repay deposits before the maturity date with the consent of the depositor. However, the company may be required to pay additional interest or penalties as specified in the deposit agreement.
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