The Ministry of Corporate Affairs has issued the Companies (Acceptance of Deposits) Amendment Rules, 2020 vide notification dated September 07, 2020 prescribed under the provisions of Companies Act, 2013.
The key amendment is as follows:
In rule 2, in sub-rule (1), in clause (c), in sub-clause (xvii) of the Companies (Acceptance of Deposits) Rules, 2014, the amended rule provides that a Start-up Company receiving an amount of Rs. 25 Lakhs or more by way of convertible note (which is convertible into equity shares or repayable) within a period of not exceeding 10 years (earlier the period was 5 years) from the date of issue in a single tranche from a person, shall not be treated as a deposit.
Please find a copy of the notification here.
This update has been contributed by Pooja Chakrabarti (Partner) and Kiran Sharma (Associate).
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.