# Kinds of Deposits under the Companies Act, 2013

The Act recognises two distinct streams through which a company can accept deposits. The stream determines which company can accept, whose money it can take, and what compliance it must follow.

## 1. Deposits from Members — Section 73

Available to both private and public companies.
A company may, after passing a resolution in general meeting and complying with rules made in consultation with the RBI, accept deposits from its members.
Terms (security, repayment, interest) are as agreed between the company and the members.

## 2. Deposits from the Public — Section 76

Only an Eligible Company can tap public deposits.

### Who is an 'Eligible Company'? [Rule 2(1)(e)]

A public company having:

Net worth ≥ ₹100 crore, OR
Turnover ≥ ₹500 crore

### Resolution requirement

Default rule: Special Resolution in general meeting.
Exception (ordinary resolution sufficient): if

> (Proposed deposits from public + Existing borrowings) ≤ (Paid-up share capital + Free Reserves + Securities Premium)

### Other key conditions for Section 76

Credit rating must be obtained every year from a recognised credit rating agency. The rating covers net worth, liquidity, and ability to pay deposits on due date.
Secured deposits: A charge on the company's assets must be created within 30 days of acceptance.

## Quick comparison table

Feature	Sec 73 (Members)	Sec 76 (Public)
Who can accept	Any private/public co.	Only Eligible Company
Resolution	General-meeting resolution	Special Resolution (Ordinary if within limit)
Annual credit rating	Not mandated	Mandatory
Charge for secured deposits	Per Rule 6 (30 days)	Per Rule 6 (30 days)

## Conditions for accepting deposits from members (Sec 73 detail)

1. Circular to members — showing financial position, credit rating, number of depositors, amount due on past deposits, etc.

2. File copy of circular with Registrar — within 30 days before date of issue.

3. Deposit Repayment Reserve Account (DRRA) — by 30th April each year, deposit ≥ 20% of deposits maturing in the following financial year in a separate scheduled bank account.

4. No default in last 5 years in repayment of deposits/interest must be certified.

5. Security (if any) — charge to be created. Where deposits are unsecured or partially secured, they must be expressly described as 'unsecured deposits' in every circular/document.

### Carve-outs from points (a)–(d) above — Private companies that need NOT comply

(A) Private company accepting from members up to 100% of aggregate of Net worth, AND files details in Form DPT-3; OR

(B) Start-up company — for 5 years from incorporation; OR

(i) Not an associate or subsidiary of any other company;

(ii) Borrowings from banks/FIs/body corporate are less than [2 × Paid-up share capital] or ₹50 crore, whichever is lower;

(iii) No default subsisting at the time of accepting deposits.

Even these exempt companies must file Form DPT-3 with the Registrar.

## Repayment & failure to repay

Every deposit must be repaid with interest per the agreed terms.
On failure to repay, the depositor may apply to the Tribunal (NCLT) for an order directing the company to pay the sum due or compensate loss/damage.
The DRRA can be used only for repayment of deposits — for no other purpose.

Worked example

### Example 1

Example 1 — Identifying an Eligible Company

ABC Ltd. (public) has Net worth ₹80 crore and Turnover ₹520 crore. Can it accept deposits from the public?

Solution: Eligibility requires Net worth ≥ ₹100 cr OR Turnover ≥ ₹500 cr. Turnover criterion is met (₹520 cr ≥ ₹500 cr). Hence ABC Ltd. qualifies as an Eligible Company and can accept public deposits under Sec 76 after a special resolution (or ordinary resolution if within the prescribed limit).

### Example 2

Example 2 — Ordinary vs Special Resolution

XYZ Ltd. (Eligible Company) has Paid-up capital ₹40 cr, Free Reserves ₹20 cr, Securities Premium ₹10 cr (total ₹70 cr). Existing borrowings ₹30 cr. It proposes to raise public deposits of ₹35 cr.

Solution: Proposed + existing = ₹35 cr + ₹30 cr = ₹65 cr ≤ ₹70 cr (PUSC+FR+SP). Hence an ordinary resolution suffices; special resolution is not required.

### Example 3

Example 3 — Private company exemption (Start-up)

FreshStart Pvt. Ltd. was incorporated on 1-Apr-2024. It accepts deposits from members on 1-Sep-2026. Is it exempt from conditions (a)–(d) of Sec 73?

Solution: Yes — as a start-up it is exempt for 5 years from incorporation, i.e., up to 31-Mar-2029. However, it must still file Form DPT-3 with the Registrar.

⚠️ Common exam mistakes

Treating Section 73 as restricted only to private companies — it applies to BOTH private and public companies accepting from members.
Forgetting that ONLY an Eligible Company (a public company crossing the Net worth/Turnover thresholds) can accept deposits from the public under Sec 76.
Using 'AND' instead of 'OR' for the Eligible Company test — Net worth ≥ ₹100 cr OR Turnover ≥ ₹500 cr (either is sufficient).
Mixing up the DRRA percentage — it is 20% of deposits maturing in the following financial year, NOT 20% of total deposits.
Assuming exempt private companies (start-up, 100%-of-net-worth, etc.) need not inform the Registrar — they must still file Form DPT-3.
Confusing 'special resolution' as always required for public deposits — an ordinary resolution suffices if the prescribed limit is met.

Bare-Act text Sections 73 & 76; Rule 2(1)(e) · Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 · click to expand

Section 73(2): A company may, subject to the passing of a resolution in general meeting and subject to such rules as may be prescribed in consultation with the Reserve Bank of India, accept deposits from its members on such terms and conditions, including the provision of security, if any, or for the repayment of such deposits with interest, as may be agreed upon between the company and its members, subject to fulfilment of the conditions specified in clauses (a) to (e). Section 76(1): Notwithstanding anything contained in section 73, a public company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to compliance with the requirements of Part I of Chapter V and subject to such rules as the Central Government may, in consultation with the Reserve Bank of India, prescribe.

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Kinds of Deposits — From Members (Sec 73) vs From Public (Sec 76)

Worked example

⚠️ Common exam mistakes