CA Intermediate · Corporate and Other Laws · Acceptance of Deposits by Companies
Anita Pharma Ltd, a public company, wishes to invite deposits from the public through a circular. Which of the following is a correct requirement before it issues the circular?
Before inviting deposits, the company must have its circular approved by the board and file a copy with the Registrar of Companies before issuing it. Central Government or RBI approval is not a general requirement for an ordinary company, so filing with the Registrar is the correct step.
- AIt must file a copy of the circular with the Registrar of Companies before issue, after board approvalCorrect
- BThe circular needs no approval and no filing if only members are invited
- CThe circular must be approved by the Central Government
- DThe circular must be approved by the Reserve Bank of India in every case
Explanation
A company inviting deposits issues a circular, which must be approved by the board and filed with the Registrar before it is issued. For members, the circular is generally issued by the company after an ordinary or special resolution as required. Central Government approval is not required, and RBI approval applies to NBFCs rather than ordinary companies. So the correct step is filing with the Registrar.
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