Corporate and Other Laws · Acceptance of Deposits by Companies

Circular, Advertisement and Return of Deposits under the Companies Act

Updated 4 October 2026 · Fact-checked

A company inviting deposits must first issue a circular (or an advertisement in circular form) with prescribed details and file it with the Registrar before issue. It then issues deposit receipts, keeps a register of deposits, and files DPT-3 each year by 30 June. In answers, state the rule, apply the facts, then conclude.

Understand Circular, Advertisement and Return of Deposits

Deposits are raised from the public or from members, so the law makes the company tell lenders the truth before taking their money. The circular is that disclosure document. It is for deposits what the prospectus is for shares.

Under section 73(2)(a), a company accepting deposits from its members must issue a circular. The circular must include a statement of the company's financial position, the credit rating obtained, the total number of depositors and the amount due on earlier deposits, and other particulars in the prescribed form. A public company that is eligible under section 76 may take deposits from persons other than members. It must also comply with section 73(2) and must obtain a rating from a recognised credit rating agency every year during the tenure of the deposits.

A circular in the form of advertisement is the same disclosure put out as a newspaper advertisement. Under the Companies (Acceptance of Deposits) Rules, 2014, it is published in an English newspaper and a regional-language newspaper with wide circulation in the state of the registered office, and also on the company's website. If the deposits are not fully secured, section 73(2) says they must be called unsecured deposits in every circular, form, advertisement or related document.

After the circular, the company must keep records. It issues a deposit receipt to each depositor. It maintains a register of deposits under Rule 14. Every year it files a return of deposits in Form DPT-3. Form DPT-4 is the statement connected with deposits accepted before the 2013 Act commenced, as required by section 74(1)(a): the company files with the Registrar a statement of those deposits and unpaid sums, with the arrangements for repayment, within three months from commencement or from the due date. Filings with the Registrar are made in electronic form under the rules framed using section 398.

The form details, time limits and rule numbers below come from the Companies (Acceptance of Deposits) Rules, 2014. They are not in the sections quoted here, so check the current rules and ICAI's amendments before the exam.

Key rules to remember

Circular to members: Circular must show: financial position + credit rating + number of depositors + amount due on earlier deposits + other prescribed particulars; Section 73(2)(a). The circular follows the prescribed form (Form DPT-1 under the Rules).
Filing the circular: Copy of circular + statement filed with Registrar within 30 days before the date of issue of the circular; Section 73(2)(b). Filing comes before issue, not after.
Unsecured deposits: Deposits not secured, or only partly secured = 'unsecured deposits'; Must be stated as such in every circular, form, advertisement or related document (proviso to section 73(2)(f)).
Circular in form of advertisement: English newspaper + regional-language newspaper (state of registered office, wide circulation) + company website; Rule 5 of the Companies (Acceptance of Deposits) Rules, 2014.
Validity of circular: Earliest of: 6 months from close of the financial year of issue | date financial statements are laid at AGM | last date by which AGM should have been held; Rules, 2014. Whichever of the three comes first.
Deposit receipt: Issue within 21 days from receipt of money or realisation of cheque/draft; Signed by an officer authorised by the Board and countersigned by another authorised person. Rules, 2014.
Register of deposits: Kept at registered office; entries authenticated by company secretary or another authorised person; preserve at least 8 years from end of the financial year of the last entry; Rule 14. Confirm the latest wording in your ICAI material.
DPT-3 return: Filed by 30 June each year, with information as on 31 March, certified by the auditor; Return of deposits and particulars of receipts not treated as deposits. Rules, 2014.
DPT-4 statement: Pre-commencement deposits and unpaid sums + repayment arrangements, filed within 3 months of commencement or of the due date; Section 74(1)(a) gives the statement and the three-month period.

How to solve Circular, Advertisement and Return of Deposits questions

Use this order for any question on the circular, advertisement, receipts, register or returns.

1Identify the stage: is the question about inviting deposits (circular), taking them (receipt), recording them (register) or reporting them (DPT-3 or DPT-4)?
2Check who is giving the deposit: members under section 73(2), or non-members under section 76 (eligible public company with prescribed net worth or turnover, and an annual credit rating).
3State the rule in plain words with its exact condition, such as 'filed with the Registrar within thirty days before the date of issue'.
4Apply the facts: compare each date, number or item in the question with the rule and mark what is missing or late.
5For time limits, compute the date carefully: 21 days for a receipt, 30 June for DPT-3, the validity cut-off for a circular.
6Conclude clearly: compliant or not, and what the company must do. Mention the liability only if the rule is clear in your material.

Quickest way: MCQ and written-answer shortcut

When to use it: Use when you have about 2 minutes for an MCQ or 8 to 10 minutes for a 5 to 6 mark written answer.

Memorise four anchors: circular filed BEFORE issue, receipt within 21 days, register kept 8 years, DPT-3 by 30 June.
In an MCQ, spot the stage first, then eliminate options that reverse the sequence, such as filing the circular after issue.
Watch for traps: wrong date, wrong number of days, 'members' versus 'public'.
In a written answer, use three short blocks: Provision, Facts, Conclusion.
Under Provision, list the contents or time limits in bullets so each point can earn a step mark.
Write the section number only where you are sure (73, 74 or 76). Otherwise say 'the Companies (Acceptance of Deposits) Rules, 2014'.

Common mistakes in Circular, Advertisement and Return of Deposits

Saying the circular is filed with the Registrar after it is issued.
Most filings in company law happen after the event, so students assume the same here.
Fix: Remember section 73(2)(b): the copy is filed within thirty days before the date of issue.
Leaving out the credit rating or the details of earlier deposits from the contents of the circular.
Students remember only 'financial position'.
Fix: Use the checklist: financial position, credit rating, number of depositors, amount due on earlier deposits.
Confusing the 21-day deposit receipt rule with the 30-day filing rule.
Both are short periods and sound alike.
Fix: Tie 21 days to the receipt and 30 days to the circular and its filing.
Treating DPT-4 as the yearly return.
Both forms are named DPT.
Fix: DPT-3 is the annual return due by 30 June. DPT-4 relates to deposits accepted before the 2013 Act (section 74(1)(a)).
Forgetting to call deposits 'unsecured' when they are not secured.
Students think this label is only an accounting matter.
Fix: Section 73(2)(f) proviso requires the words 'unsecured deposits' in every circular, form, advertisement or document on the invitation or acceptance of deposits.
Claiming a circular stays valid for a year.
Students assume it works like a prospectus.
Fix: Use the earliest of the three events: six months after the financial year closes, financial statements laid at AGM, or the last date the AGM should have been held.

Worked examples

Example 1

Alpha Ltd, a public company, issued a circular to its members on 15 January 2027 in the financial year 2026-27. It laid its financial statements at the AGM on 15 September 2027. Until what date was the circular valid?

Show the solution

Rule: the circular stays valid until the earliest of three dates.
Date 1: six months from the close of the financial year of issue. The year closed on 31 March 2027, so this is 30 September 2027.
Date 2: the date the financial statements are laid at the AGM, which is 15 September 2027.
Date 3: the last date by which the AGM should have been held. The Act requires the AGM within six months of the year-end for this purpose, so it is 30 September 2027.
The earliest of 30 September 2027, 15 September 2027 and 30 September 2027 is 15 September 2027.

Answer: The circular was valid until 15 September 2027.

Example 2

Beta Ltd received a deposit of ₹5,00,000 from a member by cheque on 10 June 2026. The cheque was realised on 14 June 2026. By what date must the deposit receipt be issued, and who signs it?

Show the solution

Rule: the receipt is issued within 21 days from the receipt of money or realisation of the cheque.
Here the 21 days run from the realisation of the cheque, 14 June 2026.
Count: 14 June plus 16 days is 30 June. Five more days gives 5 July.
So the last date is 5 July 2026.
The receipt is signed by an officer authorised by the Board and countersigned by another person authorised by the Board.

Answer: The deposit receipt must be issued by 5 July 2026. It is signed by an officer authorised by the Board and countersigned by another authorised person.

Exam tips

Learn the circular contents from section 73(2)(a) as a four-item list. This is a common theory question.
Practise date-based MCQs: 21 days for receipts, 30 June for DPT-3, and the circular's validity cut-off.
For case studies, mark the missing step first, such as an unfiled circular, no rating or no receipt, and then state the consequence.
Keep the sequence in mind: Board approval, circular, filing with Registrar, issue, acceptance, receipt, register, annual DPT-3.
Do not quote penalty amounts or rule numbers you are unsure of. A clear rule in plain words earns marks.

Practice questions from Acceptance of Deposits by Companies

Circular, Advertisement and Return of Deposits: frequently asked questions

Is the circular filed before or after it is issued?

Before. Section 73(2)(b) requires a copy of the circular with the statement to be filed with the Registrar within thirty days before the date of issue.

What is a circular in the form of advertisement?

It is the same circular published as a newspaper advertisement. Under the 2014 Rules it appears in an English newspaper and a regional-language newspaper in the state of the registered office, and on the company's website.

When is DPT-3 due and what does it cover?

DPT-3 is the annual return of deposits, due by 30 June with information as on 31 March, certified by the auditor. It also reports particulars of money received that is not treated as a deposit.

What is DPT-4?

DPT-4 is linked to section 74, which deals with deposits accepted before the 2013 Act commenced. The company files a statement of those deposits and unpaid sums, with its repayment arrangements, within three months.