A Limited having a net worth of 200 crore wants to accept deposits from its members. It has approached you to advise whether it falls within the…

According to Rule 2 (1) (e) of the Companies (Acceptance of Deposits) Rules, 2014, an “eligible company” as referred to in section 76 (1) of the Companies Act, 2013 means a public company, having a net worth of not less than one hundred crore rupees or a turnover of not less than five hundred crore rupees and which has obtained the prior consent of the company in general meeting by means of a special resolution and also filed the said resolution with the Registrar of Companies before making any invitation to the public for acceptance of deposits. However, an 'eligible company', which is accepting deposits within the limits specified under section 180 (1) (c), may accept deposits by means of an ordinary resolution. According to Rule 4 (a) of the Companies (Acceptance of Deposits) Rules, 2014, an 'eligible company' shall accept or renew any deposit from its members, if the amount of such deposit together with the amount of deposits outstanding as on the date of acceptance or renewal of such deposits from members does not exceed ten per cent. of the aggregate of the paid-up share capital, free reserves and securities premium account of the company. A Limited is having a net worth of 200crore. Hence, it falls in the category of 'eligible company'. The fact that turnover has not been stated in the question will not affect this answer, since fulfilling any one criteria will be sufficient. Thus, A Limited has to ensure that acceptance of deposits from its members together with the amount of deposits outstanding as on the date of acceptance or renewal of such deposits from the members, in no case, exceeds 10% of the aggregate of the paid-up share capital, free reserves and securities premium account of the company.