inter corporate deposits & rpt

INTER CORPORATE DEPOSITS & RELATED PARTY TRANSACTIONS

DATE- 13th August, 2015TIME- EVENING SESSION

VENUE- Hotel Taj, Sector-17A, Chandigarh.

ORGANISERSYoung Members Empowerment Committee of ICAI -

Chandigarh Branch of NIRC of ICAI

INTER CORPORATE DEPOSISTS & RELATED PARTY TRANSACTIONS

• Any loan made by holding company to its WOS CXIIR10(1) – Allowed

CONTROVERSIAL • “to any other person in whom

Director is interested” • Not allowed as per provisions of

Section 185

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• Any guarantee given or security provided in respect of loan made by any bank or FI to its subsidiaries CXIIR10(2) – No Controversy CONTROVERSIAL • “to any other person in

whom Director is interested” • Not allowed as per

provisions of Section 185 Team AGBians


RoI - Govt. Security Deposit closest to the tenor of loan S186(7) -1/3/5/10 years

No subsisting default in repayment of deposits S186(8)

Upto 60% of PuC, FR and SP or 100% of FR and SP WeiM• Unanimous BR in BM and Consent of FI, Banks – if

default in repayment of loan > 60% of PuC, FR and SP or 100% of FR and SP – • SR GM and Consent of FI, Banks – default or no

default Compliances, Records and Disclosures – as prescribed in Law

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Loan to MD/WTD S185(1)(a)(i)

• Service Condition to All its Employees

Loan to MD/WTD S185(1)(a)(ii)

• Scheme approved by SR – GMLoan in Ordinary Course of Business S185(1)(b)• For example NBFC but at a rate

not less than bank rate Team AGBians


Loan to Director Allowed with some conditions for private companies

Section 185

Whichever is lower

Body Corporate not invested any money

Borrowing from banks or financial institutions < twice of paid up

share capital or 50 Crore Rupees

No default in repayment of such borrowings

NOTIFICATION DATED 05 June, 2015G.S.R 464(E)


• Two Layers of Investment Companies Are Allowed

• More than two layers for acquiring company beyond India allowed

• Acquisition of Securities allowed • By way of BR to the extent of 60% of

PuC+FR+SPA or 100% of FR+SPA whichever is more

• BR with the consent of all the Directors present

• By way of SR in GM beyond the limits mentioned above

• Plus some other conditions like prior approval of FI, Banks

• Disclosure of Investment in Board’s Report

INTER CORPORATE INVESTMENTS S186

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Notification dated 10th March, 2015

Circular No. 04/2015

Loans and advances to employees, as per service rules. Not governed by Section

186 of CA, 2013


• Preparing the List - On the basis of Disclosures under Section 184-

Detailed Agenda along with specific disclosures C12R15(1)

Interested Director not to participate C12R15(2)

SR in General Meeting by Non-Interested Shareholders Detailed Explanatory Statement along with

specific disclosures

• Private Limited Companies (Interested Shareholders can also vote) -Notification dated 5th June, 2015

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Related Party TransactionExemptions - Proviso 3 to S188(1) • Transactions entered in

Ordinary Course of Business• Arm’s length transaction -

Disclosure in Board’s Report with justification S188(2)

Entry in Register of Contracts and Arrangements S189

Reporting of Resolution – MGT14

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Related Party Transaction

Arm length Transaction

Disclosure Form AOC-2 with Directors Report

Related Party Transaction

Not at Arm Length Transaction

Form AOC-2 Not required with Directors Report

ADDITIONAL DISCLOSURE


Notification dated 14th August, 2014G.S.R. 590(E)

Limit of paid up share capital of Rs 10 Crore to enter into contract with related party DELETED


Related Party Transactions

Related Party can vote on

resolution U/S 188

Chapter XIl, second proviso to subsection (1) of section 188

NOTIFICATION DATED 05 June, 2015G.S.R 464(E)


Chapter V‐Deposits

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Inter-Corporate Deposits Exempted

As per Rule 2C(vi) of Companies

(Acceptance of Deposits) Rules, 2014

Banking Co. & NBFC’s not covered - RBI will govern - Section-73(1)

Cannot accept deposit except from members that too after complying stringent conditions – Section - 73

Public Companies (having such networth & turnover as prescribed) can take deposits from others - Section-76(1)

Chapter V‐Deposits Section-73-76

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Repayment

•Deposit+ Interest

Terms & Condition

s•Agreement

S73(3) of CA, 2013

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S73(4) of CA, 2013

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Acceptance of deposits from membersRelaxation in-

• Issue Circular • File circular with ROC •Maintain deposit repayment reserve

• Provide deposit insuranceWhen deposits from members is upto 100% of

aggregate of paid up share capital and free reserves

Chapter V- Section-73(2) (a) (e)- Notification dated 05 June, 2015


S74(1) of CA, 2013

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Extend Time

Tribunal

S74(2) of CA, 2013

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Repayment of Deposits

S73(5) of CA, 2013

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S74(3) of CA 2013

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Company

Resolution RBI Consultation

Terms & Conditions Conditions

Circular+Statement(Members)

Copy(Registrar)

<15%(Scheduled Bank)Deposit Repayment Bank Account

Deposit Insurance

Certificate(Repayment+ Interest)

Security

If not(Unsecured Deposits)

PROHIBITION ON ACCEPTANCE OF DEPOSITS FROM PUBLIC

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DepositsNon-

Payment

Proved(Defraud

)Penalty

S75 of CA, 2013

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Ajay Garg Team AGBians

[email protected]

www.agbcorplegal.com

09811386723

Thank you

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