Mr. Mudit works as an employee at ABC Private Limited with an annual salary of 3,00,000, as specified in his employment contract. Mr. Mudit paid to…

CA Intermediate · Corporate and Other Laws · MTP · January 2025
Mr. Mudit works as an employee at ABC Private Limited with an annual salary of 3,00,000, as specified in his employment contract. Mr. Mudit paid to the company - 3,50,000 in the nature of non-interest bearing security deposit. Giving regard to the provisions of the Companies Act, 2013, choose the correct option out of the following:
(A) The deposit is a valid transaction since it is a non-interest-bearing security deposit provided under the terms of his employment.
(B) The deposit violates the Companies Act, 2013, because companies cannot accept deposits from their employees.
(C) The deposit violates the Companies Act, 2013, as the amount exceeds Mr. Mudit's annual salary.
(D) The deposit is invalid unless approved by the company's shareholders in a general meeting.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

The deposit violates the Companies Act, 2013, as the amount exceeds Mr. Mudit's annual salary.

Topics: The Foreign Exchange Management Act, 1999

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