In Continuation with Feb Edition

As mentioned in our earlier edition, there are lots of amendments and reforms made by MCA in recent days. Out of which we have already seen 2 amendments in last edition. In this edition, we will be seeing one more amendments. It is about amendments in the  Companies (Acceptance of Deposits) Rules, 2014 along with our usual Legal terms and News Bites related to notifications by MCA, SEBI, RBI, IT and GST.

 Saranya Deivasigamani,

CEO

---

 DPT-3

MCA vide its notification dated 22nd January, 2019 notified Companies (Acceptance of Deposits) Amendment Rules, 2019, in which ‘sub–rule 3’ in Rule 16A is inserted to file e-form DPT-3 mandatorily for information of Loan to ROC. E-Form DPT-3 is required to be filed pursuant to section 73 read with rule 16 of the of the  Companies (Acceptance of Deposits) Rules, 2014 Accordingly, in order to protect and safeguard the interest of deposit holders or creditors of the Company, the Central Government in consultation with the Reserve Bank of India (RBI),  have notified in the Companies (Acceptance of Deposits) Amendment Rules, 2019 to amend the Companies (Acceptance of Deposits) Rules, 2014. Rule 16A (3) Every company other than Government Company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to 22nd January, 2019 (till the date of publication of this notification in the Official Gazette), as specified in Form DPT-3 within ninety days from the date of said publication of this notification along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014. KEY POINTS OF THE NEW NOTIFICATION AND ITS APPLICABILITY:-

1. Applicability: – All Companies (Private, Public, OPC, etc.) except Government Companies are required to file DPT-3.
2. Due Date: –One-time return in E-Form DPT-3 is required to be filed within 90 days of publication of this notification in Official Gazette (22nd January, 2019+ 90 days i.e. by 22nd April, 2019)
3. Requirement: –Filling is required to be done for both secured & unsecured outstanding money/loan not considered deposits are mentioned below which are not treated as deposits as per Rule 2(1)(c) of Companies (Acceptance of Deposits) Rules, 2014. DPT-3 needs to file in respect of these transactions.
4. Initial Return: –The period which is covered for filing this return is from 01st April, 2014 till 22nd January, 2019. Also be filed in case the loan/money outstanding is taken from its holding/subsidiary or associate company.
5. Filing Fees: –Fees shall be payable as per the Companies (Registration Offices and Fees) Rules,

Brief view of above notification:-

1. The Concept of Deposit

Section 2(31) of CA, 13 defines the term ‘deposit’ in an inclusive manner which provides that any receipt of money by way of deposit or loan by a company shall be termed as deposit. An extension to this definition has been provided in Rule 2(1)(c). Further, Sections 73 to 76A of CA, 13 contain the provisions relating to acceptance of deposits from members by private companies and from persons other than members by public companies and the procedural requirements for the same have been prescribed by the ministry through the Rules. Therefore, the reporting requirement comes from the Rules. Rule 16 of the existing set of Rules requires filing of the return of deposits (e- form DPT-3) within 30th June every year by the companies accepting deposits. Apparently, till date, the reporting requirement was applicable only to those companies which have accepted money considered as deposits as per the definition. Therefore, the reporting by other companies was not required. However, the amendment is seemingly intending to include those other companies too within its purview.

2. Eligibility

The amendment will hit almost all companies irrespective of the status thereof, i.e., Small Company, Public Company, Private Company, One Person Company. However, the same rules excludes a Government Companies, Non-Banking Financial Companies (NBFCs) NBFC from the reporting requirement.

1. a) Paid-up share capital of which does not exceed Fifty Lakh Rupees or
2. b) Turnover of which as per its last profit and loss account does not exceed Two Crore Rupees or such higher amount as may be prescribed which shall not be more than Twenty Crore. Provided that nothing in this Section shall apply to—
3. A holding Company or a subsidiary company;
4. A Company registered under Section 8; or

iii. A Company or body corporate governed by any special Act;

3. Period of Return

The amendments require reporting of the following by the companies with the registrar:

1. A one-time return which will give the details of the outstanding receipt of money or loan which have not been considered as deposits as per Rule 2(1)(c) of the Rules. For this, the period of such receipt of money or loan has to be considered from 1stApril 2014 till the date of publication of the notification in the gazette, i.e., 22nd January 2019 and which are outstanding as on the said date. The reporting has to be done within 90 days of the said publication.
2. A periodic return which will give the details of particulars of transactions which are not considered as deposits as per Rule 2(1)(c) of the Rules within 30thJune of every year containing details as on 31st March.
3. Exempted Transactions

Rule 2(1)(c) defines the term ‘deposit’ in an exclusive manner and enlists 19 transactions which are not treated as deposits. Below is the list of the items that are excluded from the term ‘deposit’ subject to the conditions/ exceptions mentioned thereunder-

1. Amount received from central government, state government etc;
2. Amount received from foreignx governments/ banks etc;
3. Amount received as loan from banks, banking companies etc;
4. Amount received as loan from Private Finance institutions (PFIs), any regional Financial Institutions or insurance companies or scheduled banks;
5. Amount raised through issuance of commercial paper;
6. Inter- corporate deposits;
7. Amount received as subscription money for securities pending allotment;
8. Amount received from directors/ relative of directors in case of a private company;
9. Amount raised by issue of secured bonds/ debentures;
10. Amount raised through issuance of unsecured listed NCDs;
11. Non-interest bearing security deposit received from employees;
12. Non-interest bearing amount held in trust;
13. Advance from customers;
14. Amount brought by the promoters;
15. Any amount accepted by a Nidhi;
16. Any amount received by way of subscription in respect of a chit;
17. Any amount received by the company under any collective investment scheme;
18. Amount received by start- up company by way of convertible note;
19. Amount received from Alternate Investment Funds (AIFs), venture capital funds (VCFs) real estate investment trusts (REITs) etc.
20. Consequences for non- reporting

If the company is non-compliant with the provisions of the law i.e. does not file DPT-3 and still accepts deposits then it shall: Do not forget to advise your eligible clients to file the One Time Return in e-form DPT-3 as soon as possible without waiting for the last date i.e. 22nd April, 2019

---

Legal Term

Ceveat

A warning or proviso of specific stipulations, conditions, or limitations.

---

MCA Updates

• Extension of Tenure of High Level Committee or Corporate Social Responsibility -2018.
• Re-Constitution of Insolvency Law Committee.
• Clarification on filling of e-form RD- l.
• National Guidelines on Responsible Business Conduct.
• Appointment Notification of Member, CCI Dated 18.03.2019

SEBI Updates

• Disclosure of significant beneficial ownership in the shareholding pattern.
• Review of Investment by Foreign Portfolio Investors (FPI) in Debt Securities
• Clarification on Cyber Security & Cyber Resilience Circular.

RBI Updates

• Prevention of Market Abuse.
• Export and Import of Currency.
• Investment by Foreign Portfolio Investors (FPI) in Debt .
• Establishment of BO, LO / PO or any other places by foreign entities

Income Tax Updates

• No major updates.

GST Updates

• Proposed Return documents, as approved by competent authority.