The Conditional Exemption
A private company can accept monies from its members without complying with the full Chapter V deposit regime if the amount does not exceed one hundred per cent of the aggregate of paid-up share capital and free reserves, and the company files the details of the monies accepted with the Registrar. The exemption is not a blanket permission to accept deposits from the public; it is limited to members and to the prescribed limit.
The Startup Exemption
A private company that is a startup is exempt from the deposit regime for ten years from the date of incorporation, subject to the conditions in the exemption notification. The startup status must be subsisting, and the exemption does not extend to deposits from persons other than members beyond the permitted limits.
The DPT-3 Aging Disclosure
Even exempted deposits must be reported in DPT-3, and the 2022 amendments require aging details for exempted deposits. The return must reconcile the exempted monies with the books and disclose the outstanding balances by maturity. A private company that treats the exemption as a filing exemption is exposed to a DPT-3 deficiency.
The Consequences of Crossing the Limit
If the monies accepted from members exceed the prescribed limit, the excess is treated as a deposit under Chapter V, and the company must comply with the acceptance, repayment, and reserve requirements. A company that crosses the limit without transitioning to the Chapter V regime has accepted deposits in an impermissible manner.
Documentation
The file should contain: the member-wise monies register; the paid-up capital and free reserves computation; the exemption eligibility working; the DPT-3 filing with aging; and the board resolution recording the exemption basis. A file that contains only the DPT-3 acknowledgement without the eligibility working is incomplete.
Call to Action: For private company deposit exemption assessment, DPT-3 aging reconciliation, or limit-crossing remediation, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.