Guide to File DPT-3 Form (MCA) for Return of Deposits AND Analysis of Deposits under Companies Act, 2013 BY CS YASH PAREEK (WWW.CSYASHPAREEK.IN)

 

||Om Shri Ganeshay Namah||

 

Guide to File DPT-3 Form (MCA) for Return of Deposits

AND

Analysis of Deposits under Companies Act, 2013

 

Prepared by

 

TEAM YPA

CS Yash Pareek (ICSI Silver Medalist)

Valuable inputs by CS Neha Jain & CS Gajab Maheshwari (Practicing Company Secretaries)

 

 WWW.CSYASHPAREEK.IN

 

  

YASH PAREEK & ASSOCIATES

Company Secretaries

BHOPAL | INDORE | NAGPUR | AHMEDABAD

 

Reach us at:

Address: T-3, 3rd Floor, 207, M.P Nagar, Zone-II, Bhopal-462011, M.P

Mobile No: 9111575222

Email id: pcsyashpareek@gmail.com

Website: www.csyashpareek.in

Guide to File DPT-3 Form (MCA) for Return of Deposits

AND

Analysis of Deposits under Companies Act, 2013

 

1.      Provisions of Statutory Law:

 

·        Companies (Acceptance of Deposits) Amendment Rules, 2019.

 

·        Companies (Acceptance of Deposits), Rules 2014.

 

·        Section 73 to 76A of the Companies Act, 2013 (18 of 2013).

 

2.      DPT-3 Form:

 

DPT-3 form is a return form of loans that has to be filed by a company that has outstanding Deposits (Deposits and/or Exempted deposits).

 

 

3.      What is a Deposit:

 

As per section 2(31) of the Companies Act, 2013 (“Act”) read with rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014 (“Deposit Rules”) deposit includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include the receipt of money as provided under the exclusion list in the rule 2(1)(c) of the Deposit Rules.

 

4.      What is “Exempted Deposit”?

4.

The amounts received by a company but excluded from being deposits as per the list provided in Rule 2(1)(c) are exempted deposits.

 

 

5.      Applicability:

 

On 22nd January 2019, the MCA (Ministry of Corporate Affairs) rolled out a new rule in the Companies (Acceptance of Deposits), Rules, 2014 and that new rule leads to emergence of filing of DPT-3 form.

 

Pursuant to Rule 16(A) of the deposit Rules, it is mandatory for all the companies excluding the Government Companies to file a return for the outstanding receipts of money which are the loan of the company considered as deposits (here deposits also includes exempted deposits).

 

 

6.      Who has to file the DPT-3 Form?

 

Except for the Government companies, all other companies which include all Private Limited Companies, OPC, Limited Companies or Section 8 Company have to mandatorily file this form.

 

7.      One Time Return:

 

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 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.”.

 

8.      Annual Return:

 

Pursuant to Rule 16, an annual return in Form DPT-3 means return filed as return of deposit or particulars of transaction not considered as deposit or both by furnishing the information contained therein as on the 31st day of March of that year.

 

9.      Due Date:

 

30th June, 2022

 

 

10.   Should Form DPT-3 be filed if there is no Outstanding Loan?

No, the DPT-3 form must not be filed if there is no outstanding receipt of money or loan.

According to the rule 16A, DPT-3 must be filed by all the companies who have received money and loan which is due.

 

 

11.   Nature of loan covered:

 

Both secured and unsecured Loans (long term or Short Term) along with advance for goods and services must be filed in the DPT-3 Form.

 

 

12.   Amount to be Filed:

 

As per Rule 16 of the Deposit Rules, annual return of deposit is required to be filed for:

 

(a) Deposit and

 

(b) The outstanding receipt of Exempted Deposits by the company, which were taken at any point of time and outstanding as on 31st March of every financial year.

 

 

13.   Companies Exempted:

 

Also, as per Rule 1(3) of the Deposit Rules, the following class of companies are not required to file any return on deposits (the Rules are completely not applicable to these companies):

 

·        Banking companies

 

·        Registered NBFCs including insurance companies

 

·        Registered HFCs

 

·        Such other companies as may be specified by the Central Government

 

 

 

14.   Whether Auditors’ Certificate is required to be attached for filing of each return in the e-Form DPT-3?

As per the help kit of the e-Form, auditor’s certificate is mandatory only if the Form is filed either as “Return of Deposits” or as “Return of Deposits as well as Exempted Deposits”.

Therefore, if the e-Form is filed as the “Return of Exempted Deposits” (whether as one-time return or annual return), auditors’ certificate is not required to be attached.

 

15.   Audited Accounts:

 

The closure of accounts is neither linked to completion of audit nor finalisation/ approval of accounts by the Board nor adoption of the same by the shareholders.

 

 

16.   Whether interest accrued and due/not due on borrowings is also to be reported in Form DPT 3?

In our view, amount outstanding in relation to receipt of money is required to be reported. In case of loans and debentures, the amount reflected in balance sheet on liability side comprises of both principal as well as interest accrued and due. Accordingly, the same needs to be reported. Interest accrued but not due is not an outstanding liability as it is not even due, therefore, the same need not be reported.

 

17.   Whether any amount received by a private limited company from its member will be treated as Exempted Deposit?

No, as per section 73(2) of the Act, such amount will fall under the ambit of “Deposit” and accordingly, the “return of deposit” will required to be filed in e-Form DPT-3. The only leeway provided to a private company is with respect to the list of compliance to be adhered for accepting deposits. Please refer MCA notifications dated June 5, 2015 and June 13, 2017.

As per section 73(2) of the Act, any amount received by a company from its members will be treated as “Deposit”, irrespective of the fact whether the company is a Private or Public Limited.

 

18.   Government Grants

 

While Government grants are constituted to exempted deposits however their innate nature is that these are provided only after one becomes eligible for it i.e. to say government grants are provided after the entity has fulfilled/satisfied the required conditions and made expenses. Therefore, these are generally not “outstanding”. Once received, these form part of “other income” and will not be outstanding as on the end of financial year, therefore these are not required to be reported in e-Form DPT-3.

 

 

 

19.   Incentives received from Central Government

 

Incentives/Grants provided by the Government to the Company and are exempted to be deposit u/r 2(1)(c)(i) under the head “any amount received from the Central Government or a State Government. Therefore will be reported in DPT-3.

 

 

20.   NCDs

 

However, in the aforesaid case, even though the NCDs were unsecured but being issued to another company will be treated as Exempted Deposits. Accordingly, the same will be reported in one-time and annual return in e-Form DPT-3.

 

21.   Customer Advances

 

As per the rule 2(1)(c)(xii), the advance received by the company has to be allocated or appropriated against identified or specified goods or services within 365 days of acceptance.

 

It is not necessary for the company to actually deliver the goods or services within 365 days.

 

That is to say that the company may actually supply goods / materials / services ordered at its convenience as long as the advance received by it is set aside and marked for the respective goods or services within 365 days. In such a scenario, the advance received would not be treated as deposit.

 

The moment the company identifies the goods against such advance, the same is considered to be appropriated against such goods. Therefore, the said advance will not be treated as deposits even if a part of the supply is yet to be made by the Company.

 

 

22.   What will be the consequences for non- reporting?

 

Section 76A and Rule 21 are concerned about the penal consequences. Section 76A provides huge fines on the company as well as on the officers for accepting deposits in contravention of the prescribed manner or conditions in the Chapter and the Rules and also in case of failure in repayment of deposits. Further, in case of officers, the offence is non compoundable as it involves fine and imprisonment both.

 

The Section provides the following:

 

On the company: A fine of minimum one core rupees or twice the amount of deposit so accepted, whichever is lower, which may extend to ten core rupees; and

On the officers of the Company who is in default: imprisonment up to seven years and with a fine of not less than twenty five lakh rupees which may extend to two core rupees

 

From the above, it can be construed that the penal provisions provided in Section 76A shall apply only to those companies which have accepted money falling under the purview of deposits as per the definition. Therefore, if a company accepted money (e.g. ICD) which falls under the exclusion list shall not be subjected to the penal consequences of Section 76A as ICD is not a deposit.

 

On the other hand, on a reading of the language, Rule 21 seems to cover any other person also in its purview. The Rule provides fine for any other person apart from the companies covered in Sections 73 and 76, which contravenes any of the provisions of the Rules for which no punishment is provided in the Act. Therefore, for the applicability of Rule 21, one has to see the compliance requirements of the Rules also. Since the new reporting requirement has been made a part of the Rules which applies to every companies (excluding certain categories mentioned above), the consequences of Rule 21 shall apply to those companies also. Rule 21 prescribes a fine which may extend to five thousand rupees and in case of continuing violation a further fine which may extend to five hundred rupees for every day after the first day of such contravention.

 

 

23.   What is not a Deposit (Exempted Deposit)

 

Exempted deposits are termed as below:

 

·        Receipt of anything other than money.

 

·        Loans from Banks, Financial institutions and Mutual Funds.

 

·        Money received from Company.

 

·        Amount issued as CCD

Provided it is mandatorily converted in shares in 10 years

 

·        Debenture 

 

a.      Not Deposità Convertible + Secured à• Unlisted 

 

b.      Not Deposità Non Convertible + Not Secured à• Listed

 

Amount issued as Secured debentures Provided it is 100% secured

 

·        Amount received towards subscription of any securities.

Allotment to be made within 60 days from the date of receipt of money or advance. Amount not refunded within 15 days from completion of 60 days will be treated as deposits. Any adjustment will not be treated as refund.

 

·        Amount received in trust. Provided no interest is paid.

 

·        Amount raised by issuance of units.

 

·        Advance received for supply of goods/ services

▫ Maximum 365 days

 

·        Deposit from directors.

 

·        Relative of director in case of Private Company also included.

Declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and

 

a.      the company shall disclose the details of money so accepted in the Board's report

b.      Amount received from employee ▫ Not exceeding his annual salary

 

·        Commercial paper

 

·        Any other instruments issued as RBI guidelines/ notification

 

·        Short term NCDS issued with 12 months maturity and by private placement will get exempted.

 

·        Share warrants ▫ Exempt from deposits but covered u/s 62 (1) (c)

 

 

·        Promoter’s unsecured funding on stipulation imposed by lending institution

 

(a)    the loan is brought in pursuance of the stipulation imposed by the lending institutions on the promoters to contribute such finance;

 

(b)    the loan is provided by the promoters themselves or by their relatives or by both; and

 

(c)      the exemption under this sub-clause shall be available only till the loans of financial institution or bank are repaid and not thereafter.

 

·        Any other transaction not amounting to deposit in substance

 

·        Collective Investment Scheme – not a deposit

 

·        Security Deposit

 

·        Deposit from foreign corporate, citizens.

 

·        Convertible note issued by Start-up (25 lakhs or more repayable within 5 years)

 

·        Amount received by co from AIF, MF, Domestic Capital Venture, Infrastructure Investment Trusts, Real Estate Investment Trusts (inserted vide amended Rules, 2019)

 

·        Accepted by Nidhi companies subject to conditions

 

·        Amount received by STARTUPCO–25lacs and more (Pvt co + DIPP)

 

a.      Received in single tranche

b.      By way of convertible notes

c.      Converted in to equity shares or

d.      Repayable within 5 years from the date of issue

e.      From a person

 

 

 

24.   Restriction on LLP:

 

Banning of Unregulated Deposit Scheme Act, 2019

 

▫ Will prohibit deposit- taking by all unincorporated entities

 

▫Including LLPs

 

25.   Public Deposits only by Eligible Companies (Sec. 76)

A. Public Companies

                    Eligible companies means                      

·        Net worth of not less than Rs. 100 crore

Or

·        Turnover of not less than Rs. 500 crore

And

·        Has taken prior approval by Special Resolution passed in General Meeting and has filed such Resolution

Provided that an eligible company, which is accepting deposits within the limits specified under clause(c) of sub-section (1) of section 180, may accept deposits by means of an Ordinary Resolution.

Other requirements have to be complied:

•       Credit rating (every year), deposit in deposit repayment reserve account etc.

•       creation of security including creation of charge within 30 days of acceptance of deposits

•       Filing of circular for advertisement in e-Form DPT-1

 

B. Restrictions-Rule 3

Rule 3 lays down certain restrictions on acceptance of deposits by companies.

•       Companies shall not accept / renew deposits repayable on demand or upon receiving a notice within a period of less than 6 months or more than 36 months from the date of acceptance / renewal.

 

•       The company may accept/renew deposits for less than 6 months, if such deposits do not exceed 10% of aggregate share capital, free reserves and securities premium account AND Minimum tenure of be 3 months.

 

•       In case of joint shareholding, maximum number of shareholders shall not exceed 3.

 

26.   Limit on Acceptance of Deposits- Rule 3 (3, 4 & 5)

 

A.     Company shall not accept or renew any deposit from members if the amount of such deposit together with all other outstanding deposits exceeds 35% of paid-up share capital + free reserves + securities premium account.

 

B.     No Eligible company shall accept/renew:

 

•       Deposits from members-

 

If such deposits + all other outstanding deposits from members exceeds 10% of paid-up share capital + free reserves + securities premium account.

 

•       Any other deposit-

 

If the amount of such deposit (except deposit from members) + all other outstanding deposits exceeds 25% of paid-up share capital + free reserves + securities premium account.

 

•       In case of eligible company being a Government Company, shall not accept or renew deposits if such deposits + all other outstanding deposits exceeds 35% of paid-up share capital + free reserves + securities premium account

 

 

27.   COMPLIANCE AS PER THE COMPANIES ACT 2013 FOR ACCEPTING DEPOSITS FROM PUBLIC

 

 

 

•       Board of Directors at their Meeting shall pass a resolution for obtaining deposit from its Members subject to approval of Members at the General Meeting. The Board of Directors shall also approve the Application Forms for accepting deposits (containing a declaration that deposit is not made out of borrowed fund), format of Receipt of Deposit and format of Register of Deposits. The Board shall convene General Meeting of Members for the said approval

 

•       Pass special resolution and file the same with ROC before making any invitation to the Public.

 

•       Company shall accept the Application Forms for accepting deposits containing the aforesaid declaration.

 

•       Furnish a deposit receipt to the depositors within 21 days from the date of receipt of money or realization of cheques.

 

•       Company shall maintain register of deposit and make entries within 7 days from the date of issuance of the deposit receipt and such entries authenticated by a directors and company secretary of the company.

 

•       Private Company accepting deposit is required to file Form DPT-3 with ROC, annually on or before 30th June of every year and furnish the information contained therein as on the 31st day of the march of that year duly audited by auditor of the company.

 

•       Obtain credit rating and file with ROC along with DPT 3

 

•       Create Charge within 30 days of such acceptance on its assets of an amount not less than the amount of deposits accepted

 

•       Issue a circular in Form DPT-1 in English language and in vernacular language and shall place such circular on its website, if any.

 

•       The company shall execute a deposit trust deed in Form DPT-2 at least seven days before issuing the circular.

 

•       Furnish receipt within 21 days of amount received to the deposit on or before the thirtieth day of April each year, such sum which shall not be less than twenty per cent. of the amount of its deposits maturing during the following financial year and kept in a scheduled bank in a separate bank account to be called deposit repayment reserve account. The deposit repayment reserve account referred to in clause (c) of sub-section (2) shall not be used by the company for any purpose other than repayment of deposits

 

•       No company shall invite or accept or renew any deposit in any form, carrying a rate of interest or pay brokerage thereon at a rate exceeding NBFC norms.

 

28.   Forms:

 

·        DPT-1: Circular in the form of advertisement inviting deposits. File a copy of circular or statement with the registrar within 30 days before the date of issue of circular

 

·        DPT-2: Deposit Trust Deed: 7 days before issuing the circular

 

·        DPT-3: Return of Deposits.

 

·        DPT-4: Statement regarding deposits existing on commencement of the Act filed within three months from the commencement of the Act.

 

 

29.   Acceptance of Deposits by Private Companies:

Private company Accept deposits from members

•       Deposit not exceeding 100% of paid up share capital + free reserves and securities premium account

 

•       File such deposit in DPT-3

 

Relaxation from the max. limit of 100% in the following cases:

a.      Start-up Pvt. companies–For 10 years from Incorporation

 

b.      Other private companies upon fulfillment of following conditions:

 

•       Not an associate or subsidiary of any other company

 

•       Borrowings from banks / FIs / body corporate –less than twice of PUSC or 50 Cr, whichever is lower

 

•       No default in repayment of subsisting borrowings

Conclusion:

Section 73 to Section 76A and Deposit Rules govern the acceptance, renewal and repayment of deposits under the Companies Act, 2013. MCA has given certain relaxations to Private companies to accept the deposit from members without complying the some of stricter norms of Section 73 to provide ease to private companies in obtaining the finance required for business operations. Companies and professionals should exercise due diligence before considering the finance from members or public as means of capital in order to avoid the contravention of the Companies Act, 2013.

Happy reading.

Regards,

CS Yash Pareek [ICSI Silver Medalist]

Company Secretary  I     Yash Pareek & Associates {www.csyashpareek.in/Professional}

Entrepreneur             I     Manomay Innovations Private Limited {www.manomay.co.in}

Social Worker            I     Rukmani Devi Pareek Charitable Foundation {www.csyashpareek.in/socialwork}

Contact No.:  9111575222       Website: www.csyashpareek.in

Office at T-3/207, Zone-II, M.P Nagar, Bhopal-462011, M.P

 

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Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I, CS Yash Pareek assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.