On June 29, 2016, the MCA has notified the Companies (Acceptance of Deposits) Amendment Rules, 2016 (‘Amended Rules’), inter alia, expanding the scope of exemptions available for deposit of monies received by a company from being classified as a ‘deposit’ under the Companies (Acceptance of Deposit) Rules, 2014.
The Amended Rules permit companies to accept or renew deposits from members up to a maximum of 35% of the aggregate of their paid-up share capital, free reserves and securities premium account, as opposed to the earlier limit of 25%. Further, a private company can accept or renew deposits from its members up to 100% of the aggregate of its paid-up share capital, free reserves and securities premium account.
The Amended Rules have included a requirement for every eligible company to obtain a credit rating at least once every year for deposits accepted by it and disclose the deposits received from a director in its financial statements. The Amended Rules will come into force upon publication in the Official Gazette.