Question

State with reason whether the following statement is true or false:
A private company can accept the deposits from the general public.

• A. True
• B. False

Answer 1

The correct option is B False

This statement is False.

• A private company cannot invite and accept deposits from the general public. However, it can accept deposits from its directors, relatives of directors and members provided it has satisfied certain conditions required by law.

• A private company may, subject to the passing of a resolution in general meeting may accept deposits from its members.

It is clear that in the case of private companies, deposits from the public can't be accepted in any situation.