02 / Jan 2015
Amounts from Members, Directors or their relatives to a Private Limited Company,
In what will be seen as a major relief to Private Limited Companies, the Ministry of Corporate Affairs (MCA) has finally clarified that amounts received by Private Limited Companies prior to 01 April 2014, from its Members, Directors or their relatives, shall not be treated as ‘deposits’ under the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014. However, the same is subject to the condition that said Private Limited Company shall disclose in the notes to its financial statement for the financial year commencing on or after 01 April 2014, the figure of such amounts and the accounting head in which such amounts have been shown in the financial statement.
It has been further clarified that any renewal or acceptance of fresh deposits on or after 01 April 2014, shall be in accordance with the provisions of Companies Act, 2013 and rules made thereunder.
To view the relevant MCA circular, click on the link below: