Dolls Toys Limited is having a net- worth of 310 crore, paid up share capital of 200 crore, free reserves and security premium of 110 crore and…

(i) Whether Dolls Toys Limited is permitted to accept deposits from Public other than its members? Section 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 deal with acceptance of deposits from public other than its members by 'eligible companies'. Accordingly, a public company, having net worth of not less than 100crore or turnover of not less than 500crore, and which has obtained the prior consent by a special resolution and filed it with the Registrar of Companies before making any invitation to the Public for acceptance of deposit can accept deposits from persons other than its members. Eligible Company: As per Rule 2 (1) (e) of the Companies (Acceptance of Deposits) Rules, 2014, a public company, having net worth of not less than one hundred crore rupees or a turnover of not less than five hundred crore rupees, may accept deposits from persons other than its members. Such type of public company is known as 'eligible company'. In the given question, Dollys Toys Limited has a net-worth of 310crore and turnover of 300crore. Since at least one condition is satisfied that is net worth is 310crore which is more than the prescribed limit, and assuming it has obtained the prior consent by a special resolution and filed it with the Registrar of Companies, it is permitted to accept deposits from public other than its members. Thus, Dollys Toys Limited is an eligible company and hence can accept deposits from public other than its members. (ii) Whether Dolls Toys Limited permitted to accept deposits with repayment period of 4 months? As per Rule 3 (1) of the Companies (Acceptance of Deposits) Rules, 2014, a company is not permitted to accept or renew deposits (whether secured or unsecured) which is repayable on demand or in less than six months. Further, the maximum period of acceptance of deposits cannot exceed thirty- six months. Exception to the rule of tenure of six months: For the purpose of meeting any of its short-term requirements of funds, a company may accept or renew deposits for repayment earlier than six months subject to the condition that: (i) such deposits shall not exceed ten per cent of the aggregate of the paid-up share capital, free reserves and securities premium account of the company; and (ii) such deposits are repayable only on or after three months from the date of such deposits or renewal. Conclusion: Hence, Dolly Toys Limited is permitted to accept deposits with repayment period of 4 months in compliance to the stated provisions. However, by virtue of exception to the rule of tenure of six months as stated above, since the company cannot accept the deposit exceeding 10% of the aggregate of the paid up share capital, free reserves and security premium account which is 310crore therefore the company can accept the deposits to the extent of 31crore only.