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Question
For a private company, to accept deposits from public is ____________.
For a private company, to accept deposits from public is ____________.
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Solution
The correct option is B prohibited
The Companies Act, 2013 and regulations of Reserve Bank of India restrict the acceptance of deposit in a Private Limited Company. The Companies Act, 2013 allows only banking companies, non-banking financial companies, housing finance company and company specified by the Central Government to accept invite, accept or renew deposits from the public. Therefore, private limited companies are strictly prohibited form accepting public deposits.
The Companies Act, 2013 and regulations of Reserve Bank of India restrict the acceptance of deposit in a Private Limited Company. The Companies Act, 2013 allows only banking companies, non-banking financial companies, housing finance company and company specified by the Central Government to accept invite, accept or renew deposits from the public. Therefore, private limited companies are strictly prohibited form accepting public deposits.
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