Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, March 30, 2015

MCA RELAXES PRIVATE COMPANIES FOR LOANS RECEIVED PRIOR TO 01.04.13 FROM DIRECTORS AND RELATIVES

Long awaited circular has been issued by MCA today for clarification on definition of deposits. With the introduction of section 74 which was notified on April 01, 2014, any deposit accepted by a Company had to be repaid in terms of section 74 (1) by 31st March,2015. Today MCA has clarified that amounts received prior to 1st April, 2014 by private companies from their members, directors or their relatives shall be considered as deposits under the Companies Act, 2013 because such receipts / advances were not treated as 'deposits' under section 58A of the Companies Act, 1956 and rules made there under.

It is further clarified that such amounts received by private companies prior to 1st April, 2014 shall not be treated as 'deposits' under the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 but subject to the condition that  private company shall disclose, in the notes to its financial statement for the financial year commencing on or after 1st April, 2014 clearly specifying the figure along with the accounting head in which such amounts have been shown in the financial statement.

Any renewal or acceptance of fresh deposits on or after 1st April, 2014 shall, however, be in accordance with the provisions of Companies Act, 2013 and rules made there under.

Provisions of section 74 and its compliance before issue of Such Circular

Section 74 of the Act, 2013 provides that the in case of deposits accepted before the commencement of the Act, 2013, where the deposit or part thereof or interest thereon has remained unpaid on such commencement or where the deposit falls due after April 1, 2014, Company shall:

  • U/S 74(1) (a) File with the MCA a statement of deposit accepted and deposits remaining unpaid detailing the interest as well as the arrangement made for such repayment.
  • Before or on 31st March 2015 i.e within one year from such commencement or from the date on which sums are due, whichever is earlier to repay the amount outstanding with interest due there on.
Every company which has accepted deposits before the commencement of Act, 2013, to file DPT 4 with the MCA within 3 months from April 1, 2014 or from the date the deposits are falling due for payment. The details of all deposits accepted by the company and sums remaining unpaid on such deposits and the interest payable thereon along with the arrangements made for repayment are included in such form.

The due date for filing of DPT 4 was July 31, 2014 further extended up to August 31, 2014 to enable the companies to file the statements by way of General Circular no. 27/2014. Non-filing of such a statement is an offence and is punishable under Section 450 of the Act, 2013 and the Companies have to bear additional fee cost for completing the compliance by filing the DPT-4.

NOW MCA HAS RELAXED TO CERTAIN EXTENT BY NOT TAKING SUCH ADVANCES TAKEN PRIOR TO THE COMMENCEMENT OF COMPANIES ACT 2013, IN THE DEFINITION OF DEPOSITS AND ISSUED THE MOST AWAITED CIRCULAR NO.05/2015

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