Chapter 5: Acceptance of Deposits by Companies - Test 1: answer key

Question 1 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. Suryodaya Infra Ltd. is an unlisted public company (not an eligible company) with paid-up equity share capital of ₹20 crore, free reserves of ₹8 crore, and securities premium account of ₹2 crore. It has outstanding deposits from members of ₹5 crore as on 1 April 2026. The Board proposes to accept fresh deposits of ₹8 crore from members during FY 2026-27. The company had defaulted in repayment of deposits in FY 2023-24, but made good the default in September 2024. A general meeting was convened on 20 April 2026, and an ordinary resolution was passed approving the acceptance of deposits. The company issued a circular in Form DPT-1 to its members on 15 May 2026 and filed a copy with the Registrar of Companies on 10 May 2026. On 30 April 2026, the company deposited ₹50 lakh in a separate scheduled bank account called the Deposit Repayment Reserve Account, intending it to cover 20% of deposits maturing during FY 2027-28; the deposits maturing in FY 2027-28 are ₹4 crore. The company did not obtain any deposit insurance. The CFO believes that since the company has made good the earlier default, it is eligible to accept deposits, and that the DPT-1 filing and reserve account compliance are in order. Based on the above facts and the Companies Act, 2013, answer the following.

Can Suryodaya Infra Ltd. validly accept the proposed fresh deposits of ₹8 crore from its members?

1. Yes, because the company has made good the earlier default and the ordinary resolution is valid.
2. No, because the company is prohibited from accepting deposits for five years from the date of making good the default, and the ceiling is also exceeded.
3. No, because the five-year cooling period from making good the default has not elapsed, and the amount also exceeds the 35% ceiling. (correct answer)
4. Yes, because a public company can accept deposits up to 35% of aggregate capital and reserves without any other condition.

Answer: C — No, because the five-year cooling period from making good the default has not elapsed, and the amount also exceeds the 35% ceiling.

Explanation. Section 73(2)(e) requires certification that no default has been committed, and where a default had occurred, the company made good the default and a period of five years has lapsed since the date of making good the default. The default was made good only in September 2024, so the five-year cooling period has not elapsed. Separately, the 35% ceiling on deposits from members is computed on ₹30 crore (paid-up ₹20 crore + free reserves ₹8 crore + securities premium ₹2 crore), i.e. ₹10.5 crore. Existing deposits are ₹5 crore, leaving headroom of ₹5.5 crore; the proposed ₹8 crore exceeds this ceiling. Option (b) is close but option (c) correctly identifies both independent disqualifications.

Where it goes wrong. Students often assume that merely making good the default restores eligibility immediately, overlooking the mandatory five-year cooling period; they may also overlook the independent 35% ceiling breach.

Authority. Section 73(2)(e) of the Companies Act, 2013; Rule 3(3) of the Companies (Acceptance of Deposits) Rules, 2014

Question 2 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Is the filing of the DPT-1 circular with the Registrar on 10 May 2026 for a circular issued on 15 May 2026 compliant with Section 73(2)(b)?

1. No, because the copy of the circular must be filed with the Registrar at least 30 days before the date of issue of the circular. (correct answer)
2. Yes, because it was filed before the circular was issued to members.
3. Yes, because the company is a public company and the 30-day advance filing requirement applies only to private companies.
4. No, because the circular must be filed with the Registrar within 30 days after the date of issue.

Answer: A — No, because the copy of the circular must be filed with the Registrar at least 30 days before the date of issue of the circular.

Explanation. Section 73(2)(b) requires the company to file a copy of the circular with the Registrar within 30 days before the date of issue of the circular. Filing on 10 May 2026 for a circular issued on 15 May 2026 is only five days before issue and therefore does not satisfy the statutory lead time. Option (b) confuses ‘before issue’ with ‘at least 30 days before issue’; option (d) reverses the direction of the timeline.

Where it goes wrong. Students often remember that filing is required ‘before’ issue but forget the specific 30-day minimum lead period, or they incorrectly recall a post-issue filing window.

Authority. Section 73(2)(b) of the Companies Act, 2013; Rule 4 of the Companies (Acceptance of Deposits) Rules, 2014

Question 3 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

The company deposited ₹50 lakh in the Deposit Repayment Reserve Account on 30 April 2026. Deposits maturing in FY 2027-28 are ₹4 crore. Is the deposit compliant with Section 73(2)(c)?

1. Yes, because ₹50 lakh exceeds 20% of the total outstanding deposits of ₹5 crore.
2. Yes, because the company deposited the amount before 30 April 2026.
3. No, because the company must deposit 20% of the proposed fresh deposits of ₹8 crore, i.e. ₹1.6 crore.
4. No, because the company must deposit at least ₹80 lakh, being 20% of the deposits maturing in FY 2027-28. (correct answer)

Answer: D — No, because the company must deposit at least ₹80 lakh, being 20% of the deposits maturing in FY 2027-28.

Explanation. Section 73(2)(c) read with Rule 13 requires a company to deposit, on or before 30 April each year, at least 20% of the amount of its deposits maturing during the following financial year in the Deposit Repayment Reserve Account. Twenty per cent of ₹4 crore is ₹80 lakh. The company deposited only ₹50 lakh, which is short by ₹30 lakh. The base is neither total outstanding deposits nor proposed fresh deposits; it is specifically the amount maturing in the following financial year.

Where it goes wrong. Students frequently apply the 20% to total outstanding deposits or to the fresh deposits proposed, instead of the deposits maturing in the following financial year.

Authority. Section 73(2)(c) of the Companies Act, 2013; Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014

Question 4 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Is Suryodaya Infra Ltd. required to obtain deposit insurance for the deposits proposed to be accepted?

1. Yes, because Section 73(2)(d) mandates deposit insurance for every public company accepting deposits.
2. No, because the requirement of deposit insurance under Section 73(2)(d) was omitted with effect from 15 August 2018. (correct answer)
3. Yes, but only if the deposits proposed to be accepted exceed ₹10 crore.
4. No, because deposit insurance is required only for eligible companies accepting deposits from the public.

Answer: B — No, because the requirement of deposit insurance under Section 73(2)(d) was omitted with effect from 15 August 2018.

Explanation. The original Clause (d) of Section 73(2) required deposit insurance, but it was omitted by the Companies (Amendment) Act, 2017 with effect from 15 August 2018 because deposit insurance was not available in India. Consequently, no company is currently required to obtain deposit insurance under Section 73(2)(d). Options (a), (c) and (d) proceed on the repealed requirement and are therefore incorrect.

Where it goes wrong. Students using outdated study materials may continue to treat deposit insurance as a mandatory condition, ignoring the 2018 omission.

Authority. Section 73(2)(d) of the Companies Act, 2013 (omitted w.e.f. 15-08-2018)

Question 5 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. Zenith Agro Tech Pvt Ltd. is a private company incorporated on 1 April 2020 and recognised as a start-up by the Department for Promotion of Industry and Internal Trade. Its paid-up share capital is ₹40 lakh, free reserves are ₹5 lakh, and securities premium account is ₹5 lakh, aggregating ₹50 lakh. It has outstanding borrowings from banks of ₹80 lakh and has not defaulted in repayment of those borrowings. The company proposes to accept deposits from its members amounting to ₹60 lakh for a period of 18 months. The board, relying on the start-up exemption, decides not to issue a circular in Form DPT-1 or file it with the Registrar. The company files Form DPT-3 with the Registrar disclosing the monies accepted. Subsequently, the company also wants to accept a short-term deposit of ₹8 lakh from a member for a period of 4 months to meet working capital requirements. The company’s aggregate of paid-up capital, free reserves and securities premium is ₹50 lakh. Based on the above facts and the Companies Act, 2013, answer the following.

Can Zenith Agro Tech Pvt Ltd. accept deposits of ₹60 lakh from its members, which exceeds all of the aggregate of its paid-up capital, free reserves and securities premium?

1. No, because a private company cannot accept deposits exceeding all of the aggregate of paid-up capital, free reserves and securities premium.
2. No, because the company’s bank borrowings of ₹80 lakh exceed twice its paid-up capital.
3. Yes, because a private company that is a start-up is exempt from the ceiling on deposits from members for ten years from the date of its incorporation. (correct answer)
4. Yes, because a private company can accept deposits up to 200% of the aggregate if it files Form DPT-3.

Answer: C — Yes, because a private company that is a start-up is exempt from the ceiling on deposits from members for ten years from the date of its incorporation.

Explanation. The general ceiling for a private company is all of the aggregate of paid-up share capital, free reserves and securities premium account. However, the maximum limit does not apply to a private company that is a start-up for ten years from the date of its incorporation. Since Zenith Agro Tech Pvt Ltd. is a recognised start-up incorporated on 1 April 2020, the ceiling does not apply, and it can accept ₹60 lakh even though this exceeds ₹50 lakh. The borrowings condition in the ‘small private company’ exemption is irrelevant because the start-up exemption operates independently.

Where it goes wrong. Students may apply the wholly limit mechanically and ignore the specific start-up exemption, or they may confuse the ‘small private company’ conditions with the start-up exemption.

Authority. Rule 3(3) of the Companies (Acceptance of Deposits) Rules, 2014; Proviso to Rule 3(3) (start-up exemption)

Question 6 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Is the company’s decision not to issue Form DPT-1 and not to file it with the Registrar valid?

1. Yes, because a private company that is a start-up is exempt from the requirements of issuing and filing the circular under Section 73(2). (correct answer)
2. No, because every company accepting deposits, including a start-up, must issue and file Form DPT-1.
3. Yes, because the company has filed Form DPT-3 instead, which substitutes Form DPT-1.
4. No, because the exemption from Form DPT-1 applies only to private companies with no bank borrowings.

Answer: A — Yes, because a private company that is a start-up is exempt from the requirements of issuing and filing the circular under Section 73(2).

Explanation. Clauses (a) to (e) of Section 73(2), including the requirement to issue a circular in Form DPT-1 and file it with the Registrar, do not apply to a private company that is a start-up for five years from incorporation (and the ceiling exemption for start-ups is for ten years). Therefore, the start-up private company is not required to issue or file DPT-1. Form DPT-3 is a return of deposits and does not substitute DPT-1; it is an additional filing requirement. Option (b) ignores the statutory exemption.

Where it goes wrong. Students often assume that DPT-1 is universally mandatory and overlook the specific private-company/start-up exemptions; some also wrongly treat DPT-3 as a replacement for DPT-1.

Authority. Section 73(2) proviso (exemptions to certain private companies); Rule 4 of the Companies (Acceptance of Deposits) Rules, 2014

Question 7 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Is the company required to file Form DPT-3 with the Registrar?

1. No, because DPT-3 is required only for public companies accepting deposits from the public.
2. No, because a start-up private company is exempt from all deposit-related filings.
3. Yes, but only if the deposits accepted exceed ₹25 lakh.
4. Yes, because every company accepting deposits must file Form DPT-3. (correct answer)

Answer: D — Yes, because every company accepting deposits must file Form DPT-3.

Explanation. Rule 16 requires every company to which the Deposit Rules apply to file a duly examined under statutory audit return of deposits in Form DPT-3 on or before 30 June of every year. The private-company/start-up exemptions under Section 73(2) exempt certain companies from issuing a circular and filing it with the Registrar, but they do not exempt them from filing Form DPT-3. Therefore, Zenith Agro Tech Pvt Ltd. must file DPT-3. The ₹25 lakh threshold is relevant to convertible notes, not to the DPT-3 filing obligation.

Where it goes wrong. Students often conflate the DPT-1 exemption with an exemption from DPT-3, or they impose a ₹25 lakh threshold that does not apply to the return of deposits.

Authority. Rule 16 of the Companies (Acceptance of Deposits) Rules, 2014; Rule 16A of the Companies (Acceptance of Deposits) Rules, 2014

Question 8 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Can the company accept the short-term deposit of ₹8 lakh for 4 months?

1. Yes, because short-term deposits can be accepted for any amount for a period of 3 months or more.
2. No, because short-term deposits for less than 6 months cannot exceed 10% of the aggregate of paid-up capital, free reserves and securities premium, which is ₹5 lakh. (correct answer)
3. Yes, because the start-up exemption applies to the tenure of deposits as well.
4. No, because deposits cannot be accepted for less than 6 months under any circumstances.

Answer: B — No, because short-term deposits for less than 6 months cannot exceed 10% of the aggregate of paid-up capital, free reserves and securities premium, which is ₹5 lakh.

Explanation. The general rule is that deposits must be for a minimum period of 6 months and a maximum of 36 months. As an exception, a company may accept deposits for repayment earlier than six months to meet short-term requirements, provided the amount does not exceed 10% of the aggregate of paid-up share capital, free reserves and securities premium and the deposit is repayable only on or after three months. Ten per cent of ₹50 lakh is ₹5 lakh; ₹8 lakh exceeds this limit. The start-up exemption does not extend to the tenure rules.

Where it goes wrong. Students may think any amount can be accepted for 3–6 months, or they may wrongly extend the start-up ceiling exemption to the short-term tenure limit.

Authority. Rule 3(1) proviso of the Companies (Acceptance of Deposits) Rules, 2014

Question 9 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. Vayu Renewables Ltd. is a public company that accepted deposits from its members under Section 73. The deposits matured on 31 March 2025, but the company failed to repay ₹2 crore along with interest. The depositors approached the National Company Law Tribunal, which, by order dated 15 September 2025, granted the company an extension of three months to repay. Despite the extension, the company failed to repay by 15 December 2025. The company’s directors include Mr. Rao (Managing Director) and Ms. Iyer (Chief Financial Officer). The company also wants to accept fresh deposits in FY 2026-27. The board is unsure about the consequences of the default and the penalties applicable to the company and its officers. Additionally, a depositor, Mr. Mehta, whose deposit of ₹5 lakh is due for maturity on 30 June 2026, requests premature repayment on 31 March 2026, i.e., after 9 months from the date of deposit. The company wants to know the permissible deduction in the rate of interest for premature repayment. Based on the above facts and the Companies Act, 2013, answer the following.

What is the penalty payable by Vayu Renewables Ltd. for failing to repay the deposits even after the Tribunal’s extension?

1. A fine of not less than ₹1 crore or twice the amount of deposit, whichever is lower, extending up to ₹10 crore. (correct answer)
2. A fine of not less than ₹25 lakh extending up to ₹2 crore.
3. A fine of ₹1 lakh for each day of default.
4. Imprisonment of up to 7 years for the company.

Answer: A — A fine of not less than ₹1 crore or twice the amount of deposit, whichever is lower, extending up to ₹10 crore.

Explanation. Under Section 76A, where a company fails to repay the deposit or part thereof or any interest thereon within the time specified or extended by the Tribunal, the company is punishable with fine which shall not be less than ₹1 crore or twice the amount of deposit accepted, whichever is lower, but which may extend to ₹10 crore. The company is also liable to pay the deposit amount and interest. Option (b) is the range for officers in default, not the company; option (d) wrongly applies imprisonment to the company.

Where it goes wrong. Students often mix up the company’s fine with the officer-in-default’s punishment, or they incorrectly impose imprisonment on the company.

Authority. Section 76A of the Companies Act, 2013

Question 10 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

What is the liability of Mr. Rao and Ms. Iyer as officers in default for the non-repayment?

1. They are not personally liable because the liability to repay rests only on the company.
2. They are liable to a fine of ₹10 crore only.
3. They are liable to imprisonment up to 7 years and a fine of not less than ₹25 lakh extending up to ₹2 crore. (correct answer)
4. They are liable to a fine of ₹1 lakh for each day of default.

Answer: C — They are liable to imprisonment up to 7 years and a fine of not less than ₹25 lakh extending up to ₹2 crore.

Explanation. Section 76A(b) provides that every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years and with fine which shall not be less than ₹25 lakh but which may extend to ₹2 crore. This liability is independent of the company’s fine. Options (a), (b) and (d) understate or misstate the officer’s liability.

Where it goes wrong. Students may think officers are not personally liable, or they may apply the company’s fine range to officers.

Authority. Section 76A of the Companies Act, 2013

Question 11 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

For Mr. Mehta’s premature repayment after 9 months, what is the permissible reduction in the rate of interest?

1. No reduction, because the deposit has run for more than 6 months.
2. Two percent less than the rate applicable for the period the deposit has actually run.
3. The company can deduct the entire interest for the unexpired period.
4. One percent less than the rate applicable for the period the deposit has actually run. (correct answer)

Answer: D — One percent less than the rate applicable for the period the deposit has actually run.

Explanation. Rule 12 provides that where a depositor requests premature repayment after the expiry of six months but before maturity, the rate of interest payable shall be one percent less than the rate which would be payable for the period for which the deposit has actually run. The deposit has run for 9 months, so the company must pay interest at one percent less than the applicable rate for 9 months. Option (a) ignores the mandatory reduction; option (b) inflates the reduction to two percent; option (c) wrongly allows forfeiture of all interest.

Where it goes wrong. Students may think there is no reduction after six months, or they may confuse the one-percent reduction with a two-percent penalty.

Authority. Rule 12 of the Companies (Acceptance of Deposits) Rules, 2014

Question 12 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Can Vayu Renewables Ltd. accept fresh deposits in FY 2026-27 despite the default?

1. Yes, because the default is past and the company has applied for extension before the Tribunal.
2. No, because a company that has defaulted in repayment of deposits is prohibited from accepting fresh deposits until the default is made good and five years have elapsed. (correct answer)
3. Yes, because the Tribunal’s extension automatically permits fresh deposits.
4. No, because the company must first convert itself into an eligible company.

Answer: B — No, because a company that has defaulted in repayment of deposits is prohibited from accepting fresh deposits until the default is made good and five years have elapsed.

Explanation. Section 73(2)(e) requires a company to certify that it has not committed any default in repayment of deposits or payment of interest, and where a default had occurred, that it has made good the default and five years have lapsed since the date of making good the default. Vayu Renewables Ltd. has not repaid even after the Tribunal’s extension, so the default subsists. It cannot accept fresh deposits until the default is made good and the five-year cooling period expires. Extension by the Tribunal does not cure the default for the purpose of fresh acceptance.

Where it goes wrong. Students may think a pending or granted extension by the Tribunal regularises the default, or they may overlook the five-year post-repayment cooling period.

Authority. Section 73(2)(e) of the Companies Act, 2013

Question 13 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Scenario. ABC Pvt Ltd. received ₹15 lakh from one of its directors, Mr. Sharma, as an unsecured loan. Mr. Sharma furnished a written declaration that the amount was not being given out of funds borrowed from others, and the company disclosed the amount in its Board’s report. Is this amount a ‘deposit’ under the Companies (Acceptance of Deposits) Rules, 2014?

ABC Pvt Ltd. received ₹15 lakh from one of its directors, Mr. Sharma, as an unsecured loan. Mr. Sharma furnished a written declaration that the amount was not being given out of funds borrowed from others, and the company disclosed the amount in its Board’s report. Is this amount a ‘deposit’ under the Companies (Acceptance of Deposits) Rules, 2014?

1. No, because the amount received from a director with the requisite declaration is excluded from the definition of deposit. (correct answer)
2. Yes, because any loan from a director is always a deposit.
3. Yes, because the amount exceeds ₹10 lakh.
4. No, because the company is a private company and all loans from directors are exempt.

Answer: A — No, because the amount received from a director with the requisite declaration is excluded from the definition of deposit.

Explanation. Rule 2(1)(c)(viii) excludes any amount received from a person who, at the time of receipt, was a director of the company or a relative of a director of a private company, provided the director or relative furnishes a written declaration that the amount is not being given out of funds acquired by borrowing or accepting loans or deposits from others, and the company discloses the details in the Board’s report. Both conditions are satisfied here. Option (b) ignores the statutory exclusion; option (d) is too broad because the exclusion is conditional, not automatic.

Where it goes wrong. Students may treat every director loan as a deposit, ignoring the declaration-based exclusion; or they may assume the exclusion is unconditional.

Authority. Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014

Question 14 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Scenario. PQR Ltd. received an advance of ₹20 lakh from a customer for supply of goods. The advance was not appropriated against the supply of goods within 365 days. What is the consequence?

PQR Ltd. received an advance of ₹20 lakh from a customer for supply of goods. The advance was not appropriated against the supply of goods within 365 days. What is the consequence?

1. The advance remains an excluded amount indefinitely because it was received in the ordinary course of business.
2. The advance becomes a deposit only if it exceeds ₹25 lakh.
3. The advance is deemed to be a deposit on the expiry of 365 days. (correct answer)
4. The advance is automatically converted into a loan.

Answer: C — The advance is deemed to be a deposit on the expiry of 365 days.

Explanation. Rule 2(1)(c)(xii)(a) excludes an advance for supply of goods or provision of services only if it is appropriated against the supply or provision within 365 days from the date of acceptance. If it is not so appropriated, the amount is treated as a deposit. There is no ₹25 lakh threshold for this clause. Option (a) overlooks the time limit; option (d) invents a conversion that the Rules do not provide.

Where it goes wrong. Students may think business advances are permanently excluded, or they may incorrectly apply the ₹25 lakh convertible-note threshold to trade advances.

Authority. Rule 2(1)(c)(xii)(a) of the Companies (Acceptance of Deposits) Rules, 2014

Question 15 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. A start-up company, XYZ Pvt Ltd., received ₹30 lakh from an investor by way of a convertible note in a single tranche. The note is convertible into equity shares within 8 years. Is this amount a deposit?

A start-up company, XYZ Pvt Ltd., received ₹30 lakh from an investor by way of a convertible note in a single tranche. The note is convertible into equity shares within 8 years. Is this amount a deposit?

1. Yes, because convertible notes are always treated as deposits.
2. No, because a start-up receiving ₹25 lakh or more by convertible note in a single tranche, repayable or convertible within 10 years, is excluded. (correct answer)
3. Yes, because the amount exceeds ₹25 lakh.
4. No, because the note is convertible, not repayable, and therefore falls outside the deposit definition.

Answer: B — No, because a start-up receiving ₹25 lakh or more by convertible note in a single tranche, repayable or convertible within 10 years, is excluded.

Explanation. Rule 2(1)(c)(xvii) excludes an amount of ₹25 lakh or more received by a start-up company by way of a convertible note in a single tranche, provided the note is convertible into equity shares or repayable within a period not exceeding ten years from the date of issue. XYZ Pvt Ltd. received ₹30 lakh in a single tranche, and the note is convertible within 8 years, satisfying the condition. Option (c) fixes on the amount alone and ignores the start-up convertible-note exclusion; option (a) is overbroad.

Where it goes wrong. Students may think all convertible notes are deposits, or they may know the ₹25 lakh threshold but forget the single-tranche and 10-year conditions.

Authority. Rule 2(1)(c)(xvii) of the Companies (Acceptance of Deposits) Rules, 2014

Question 16 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Scenario. An employee of LMN Ltd., drawing an annual salary of ₹6 lakh, deposited ₹5 lakh as a non-interest-bearing security deposit under his contract of employment. Is this a deposit?

An employee of LMN Ltd., drawing an annual salary of ₹6 lakh, deposited ₹5 lakh as a non-interest-bearing security deposit under his contract of employment. Is this a deposit?

1. Yes, because any amount received from an employee is a deposit.
2. Yes, because the amount exceeds ₹1 lakh.
3. No, because security deposits are always excluded from the definition of deposit.
4. No, because it does not exceed his annual salary. (correct answer)

Answer: D — No, because it does not exceed his annual salary.

Explanation. Rule 2(1)(c)(x) excludes any amount received from an employee of the company not exceeding his annual salary under a contract of employment in the nature of a non-interest-bearing security deposit. The employee’s annual salary is ₹6 lakh, and the security deposit is ₹5 lakh, so it is within the exclusion. If the deposit had exceeded ₹6 lakh, the excess would have been treated as a deposit. Option (c) is too broad because the exclusion is subject to the salary ceiling.

Where it goes wrong. Students may either treat all employee security deposits as deposits or assume all such deposits are excluded, ignoring the annual-salary ceiling.

Authority. Rule 2(1)(c)(x) of the Companies (Acceptance of Deposits) Rules, 2014

Question 17 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. For FY 2025-26, what is the extended due date for filing Form DPT-3 without additional fee, as per MCA General Circular No. 02/2026?

For FY 2025-26, what is the extended due date for filing Form DPT-3 without additional fee, as per MCA General Circular No. 02/2026?

1. 30 June 2026
2. 31 July 2026 (correct answer)
3. 31 August 2026
4. 30 September 2026

Answer: B — 31 July 2026

Explanation. The statutory due date for filing Form DPT-3 for FY 2025-26 was 30 June 2026. However, MCA General Circular No. 02/2026 dated 19 June 2026 extended the due date to 31 July 2026 without additional fee, due to a fire at the MCA Data Center. Therefore, the extended date is 31 July 2026. Options (a), (c) and (d) ignore the specific extension.

Where it goes wrong. Students may apply the general statutory date of 30 June and miss the one-time extension granted for FY 2025-26.

Authority. MCA General Circular No. 02/2026 dated 19 June 2026; Rule 16 of the Companies (Acceptance of Deposits) Rules, 2014

Question 18 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. What is the maximum fine that can be imposed on a company under Section 76A for accepting deposits in contravention of Section 73?

What is the maximum fine that can be imposed on a company under Section 76A for accepting deposits in contravention of Section 73?

1. ₹1 crore
2. ₹5 crore
3. ₹10 crore (correct answer)
4. ₹25 crore

Answer: C — ₹10 crore

Explanation. Section 76A(a) provides that the company shall be punishable with fine which shall not be less than ₹1 crore or twice the amount of deposit accepted, whichever is lower, but which may extend to ₹10 crore. Therefore, the maximum fine is ₹10 crore. Options (a), (b) and (d) are incorrect figures that do not correspond to the statutory maximum.

Where it goes wrong. Students may recall the minimum fine (₹1 crore) and mistake it for the maximum, or they may confuse the figure with penalties under other chapters.

Authority. Section 76A of the Companies Act, 2013

Question 19 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · medium

Scenario. What is the minimum and maximum tenure for which a company can accept deposits from its members under Section 73?

What is the minimum and maximum tenure for which a company can accept deposits from its members under Section 73?

1. 6 months and 36 months (correct answer)
2. 3 months and 24 months
3. 12 months and 60 months
4. 6 months and 48 months

Answer: A — 6 months and 36 months

Explanation. Rule 3(1) prohibits a company from accepting or renewing deposits repayable on demand or in less than six months, and the maximum period of acceptance cannot exceed thirty-six months. The short-term exception allows repayment earlier than six months (but not earlier than three months) only for limited short-term requirements subject to the 10% limit; it does not alter the general minimum and maximum tenure. Options (b), (c) and (d) state incorrect combinations.

Where it goes wrong. Students may recall the three-month short-term exception and incorrectly treat three months as the general minimum, or they may misremember the maximum as 24, 48 or 60 months.

Authority. Rule 3(1) of the Companies (Acceptance of Deposits) Rules, 2014

Question 20 · 2 marks · Chapter 5: Acceptance of Deposits by Companies · hard

Scenario. Can a company accept deposits for a period of 4 months to meet short-term requirements?

Can a company accept deposits for a period of 4 months to meet short-term requirements?

1. Yes, without any monetary limit, because the tenure is less than six months.
2. Yes, if the company obtains the prior approval of the Tribunal.
3. No, because the minimum tenure for any deposit is six months.
4. Yes, if such deposits do not exceed 10% of the aggregate of paid-up capital, free reserves and securities premium and are repayable after three months. (correct answer)

Answer: D — Yes, if such deposits do not exceed 10% of the aggregate of paid-up capital, free reserves and securities premium and are repayable after three months.

Explanation. The proviso to Rule 3(1) permits a company to accept or renew deposits for repayment earlier than six months to meet short-term requirements, subject to two conditions: the amount must not exceed 10% of the aggregate of paid-up share capital, free reserves and securities premium; and the deposit must be repayable only on or after three months from the date of deposit. A 4-month deposit satisfies the three-month floor but must still comply with the 10% monetary ceiling. Option (c) states the general rule but ignores the statutory exception; option (a) ignores the 10% limit; option (b) invents a Tribunal approval requirement.

Where it goes wrong. Students may treat the six-month minimum as absolute, or they may recall the three-month exception but forget the accompanying 10% monetary ceiling.

Authority. Proviso to Rule 3(1) of the Companies (Acceptance of Deposits) Rules, 2014