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Microlesson · 5-min read

Kinds of Deposits: Acceptance from Members (Section 73) vs Public (Section 76)

# Kinds of Deposits under the Companies Act, 2013

The Companies Act, 2013 regulates two distinct streams through which a company may take deposits. Knowing who can accept what is the first foundation.

## 1. Deposits from Members — Section 73

  • Who can accept? Both private companies and public companies.
  • Procedural trigger: Pass a resolution in a general meeting and comply with the prescribed Rules (framed in consultation with RBI).
  • Source of funds: Only the company's own members; no public solicitation.

## 2. Deposits from the Public — Section 76

Only an Eligible Company may accept deposits from the public.

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

A public company that satisfies either:

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

### Resolution required

  • General rule: Special Resolution in general meeting.
  • Exception – Ordinary Resolution sufficient when:

> (Proposed deposits from public + existing borrowings) ≤ (Paid-up Share Capital + Free Reserves + Securities Premium)

### Mandatory Credit Rating

  • Must be obtained from a recognised credit rating agency.
  • Must cover the company's net-worth, liquidity and ability to pay deposits on the due date.
  • Rating must be obtained every year.

### Charge on Assets

Where a company accepts secured deposits from the public, it must create a charge on its assets within 30 days of acceptance.

## Quick Comparison Table

ParameterMembers (S.73)Public (S.76)
Eligible company typePvt + PublicOnly Eligible Public Co.
ResolutionResolution in GMSpecial Resolution (Ordinary if within limits)
Credit ratingNot mandatoryMandatory annually
Charge for secured depositsAs per schemeWithin 30 days

Worked example

### Example 1

Example 1 — Eligibility test: XYZ Ltd is a public company with Net Worth ₹120 crore and Turnover ₹200 crore. Can it accept deposits from public? Yes — Net Worth threshold (≥ ₹100 cr) is met. Either condition is sufficient.

### Example 2

Example 2 — Resolution type: ABC Ltd (eligible) has PUSC + Free Reserves + Securities Premium = ₹500 crore. Existing borrowings = ₹100 crore. Proposed public deposits = ₹350 crore. Since (₹350 + ₹100 = ₹450 cr) ≤ ₹500 cr, an Ordinary Resolution is sufficient instead of a Special Resolution.

⚠️ Common exam mistakes

  • Treating every public company as 'eligible' — only those crossing the net worth ₹100 cr or turnover ₹500 cr threshold qualify.
  • Assuming a Special Resolution is always required under Section 76; an Ordinary Resolution suffices when proposed deposits + existing borrowings stay within PUSC+FR+SP.
  • Forgetting that credit rating must be obtained EVERY year, not just once.
  • Confusing the 30-day charge creation timeline (for secured public deposits) with other timelines under the Act.
Bare-Act text Sections 73 and 76; Rule 2(1)(e) of Companies (Acceptance of Deposits) Rules, 2014 · The Companies Act, 2013 · click to expand
Section 73 — Prohibition on acceptance of deposits from public: A company may, after passing 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... Section 76 — Acceptance of deposits from public by certain companies: 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 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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