# Conditions for Eligible Public Companies Inviting Public Deposits
An eligible public company must satisfy several procedural conditions before inviting deposits from persons other than members.
## 1. Credit Rating Requirement
- Must obtain a credit rating from a recognised credit rating agency specified for NBFCs, indicating adequate safety for repayment.
- The rating must be disclosed to the public at the time of invitation.
- Rating must be obtained every year during the tenure of the deposit.
- A copy of the credit rating must be filed with the ROC along with the Return of Deposits in Form DPT-3.
- The rating shall not be below the minimum investment grade rating specified for fixed deposits.
## 2. Issuance of Circular (Form DPT-1)
- A circular must be issued in the form of an advertisement in Form DPT-1.
- Advertisement is to be published in:
- One English newspaper, and
- One vernacular language newspaper having wide circulation in the State where the registered office is situated.
- It must also be placed on the company's website.
- Date of issue = the date the advertisement appears in the newspaper.
- At least 30 days before issue of advertisement, a copy of the circular signed by a majority of directors (or their authorised agent) must be filed with the ROC for registration.
- The circular must be authorised by the Board and remains valid till the earlier of:
- 6 months from the closure of the FY in which it was issued, or
- The date on which the financial statements are laid in the AGM (if no AGM held, the last day by which AGM should have been held).
- After expiry, a fresh advertisement is required for further invitations in that FY.
## 3. Security for Secured Deposits
If the company accepts secured deposits from the public, it must:
- Create a charge on its tangible assets (specific movable/immovable property) within 30 days of acceptance.
- The company cannot create charge on intangible assets.
- The value of security cannot be less than the amount of deposit + interest.
- Charge must be created in favour of a trustee for depositors.
- Market value of the secured assets must be assessed by a registered valuer.
## 4. Disclosure in Financial Statements
A public company must disclose money received from its directors in its financial statements.
## Key Definitions and Limits
### Net Worth
= Paid-up share capital + All reserves created out of profits + Securities premium
Less: Accumulated losses + Deferred expenditure + Miscellaneous expenditure not written off.
Excludes: Revaluation reserves, write-back of depreciation reserves, and amalgamation reserves.
### Borrowing Limit u/s 180(1)(c)
Money to be borrowed + Already borrowed ≤ Paid-up share capital + Free reserves + Securities premium.
Borrowings here exclude temporary loans — loans repayable on demand or within 6 months (e.g., cash credit), not raised for capital expenditure, obtained from a bank in the ordinary course.
## Maximum Deposit Limits — Quick Summary
| Type of Company | From Members | From Public |
|---|---|---|
| Private Company (general) | 100% of (PUSC + FR + SP) | Not allowed |
| Private Company — Start-up (10 yrs) / Satisfies 3 conditions | No limit | Not allowed |
| Public Company (not eligible) | 35% of (PUSC + FR + SP) | Not allowed |
| Eligible Public Company | 10% of (PUSC + FR + SP) | 25% of (PUSC + FR + SP) |
## Deposit Tenure
- Less than 3 months: Not permitted.
- 3 to 6 months (short-term): Permitted up to 10% of (PUSC + FR + SP).
- 6 to 36 months: Permitted within applicable overall limits.
- Premature repayment is permitted, but the interest rate is reduced by 1% below the rate applicable to the period the deposit has actually run.