# Filing of Application Form for Making Deposits (Rule 10)

## Core Rule

A company shall accept or renew any deposit, whether secured or unsecured, only when an application is submitted by the intending depositor for acceptance of the deposit.

## Mandatory Declaration

The application must contain a declaration by the intending depositor stating that:

> The deposit is NOT being made out of any money borrowed by him from any other person.

## Why This Matters

Prevents layering of borrowed funds into corporate deposits.
Ensures the depositor is using his own funds, protecting the integrity of public/member deposits.
Failure to obtain this declaration = irregularity in acceptance.

## Quick Recall

Element	Requirement
Form	As specified by the company
Applies to	Secured AND unsecured deposits
Applies to	Both fresh acceptance AND renewal
Key clause	Declaration of non-borrowed source

Worked example

### Example 1

Example: Mr. A wants to deposit Rs. 5 lakh with XYZ Ltd. He borrows Rs. 3 lakh from a friend to make this deposit. Issue: A cannot validly make this deposit because Rule 10 requires a declaration that the deposit is NOT funded from borrowed money. If A falsely declares, both the depositor and the company face consequences for irregular acceptance.

⚠️ Common exam mistakes

Assuming Rule 10 applies only to unsecured deposits — it applies to BOTH secured and unsecured.
Forgetting that renewals also require a fresh application with declaration, not just first-time acceptance.
Confusing 'borrowed money' restriction — it bars the depositor from depositing funds he borrowed from any other person.

Bare-Act text Rule 10, Companies (Acceptance of Deposits) Rules, 2014 · Companies Act, 2013 · click to expand

A company shall accept or renew any deposit, whether secured or unsecured, only when an application, as specified by the company, is submitted by the intending depositor for the acceptance of deposit. The application shall contain a declaration made by the intending depositor to the effect that the deposit is not being made out of any money borrowed by him from any other person.

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Acceptance of Deposits - Application Form (Rule 10)

Worked example

⚠️ Common exam mistakes