Answer Writing Practice DAY4 - CS Executive Session 1

Day 4

Today's questions

Q1. Amit is having directorship of the following companies: 

Nature of Companies Number of of Companies 

Public companies (including 2 dormant companies) 8 

Private companies (including 2 subsidiaries of public companies) 10 

Alternate director (in a private company) 1 

Section 8 company 1 

Indicate how many more directorships Amit can undertake in public or private 

companies. (4 marks)

Q2. A private company and a banking company, can freely accept deposits. (5 mrk)

Q3. Draft the necessary resolution on Registration of Charge assuming the borrowing is beyond the board's authority.

Answers 1

In terms of the provisions of the Companies Act, 2013, no person, can hold office 

as a director, including any alternate directorship, in more than twenty companies at the 

same time. For reckoning the limit of directorships in twenty companies, the directorship 

in a dormant company is excluded. 

Further, out of the above twenty companies, the maximum number of Public Companies in which a person can be appointed as a director cannot be more than ten. 

For reckoning the limit of ten Public Companies, directorship in Private Companies that 

are either holding or subsidiary company of a Public Company shall also need to be 

included. 

In the given case, Amit is holding a directorship in: 

- 8 Public Companies (including 2 Dormant Companies);

10 Private Companies (including 2 subsidiaries of Public Companies); 

- Alternate Director (in a Private Company); 

- Section 8 Company 

Accordingly, in Public Company presently he is holding 8 directorship and in Private 

Company 9 directorship. Hence, total number of directorships he is already holding is 17 

(since, directorship in Section 8 Company is excluded, from reckoning the limit of 

directorship of 20 companies). 

Thus, Amit can take up directorship in 2 more Public Companies and 1 more 

Private Company

Answers 2

As per the Companies (Acceptance of Deposits) Rule,

These rules shall apply to a company other than - 

(i) a banking company; 

(ii) a non-banking financial company registered with RBI 

(iii) a housing finance company registered with the National Housing Bank 

 and 

(iv) a company specified by the Central Government . 

Accordingly, the Companies (Acceptance of Deposits) Rules, 2014 is not applicable to banking company. Hence, a banking company can freely accept deposits. 

A private company is allowed to accept deposits from its members subject to 

fulfillment of conditions 

 

However, the Ministry of Corporate Affairs notified that this rule shall not apply to following classes of 

private companies, 

(A) which accepts from its members monies not exceeding 100% of aggregate of the paid up share capital, free reserves and securities premium 

account; or 

(B) which is a start-up, for 10 ( check amendment) years from the date of its incorporation; or 

(C) which fulfills all of the following conditions, namely:- 

(a) which is not an associate or a subsidiary company of any other company; 

(b) if the borrowings of such a company from banks or financial institutions or 

anybody corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and 

(c) such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under this section: 

The company referred to in clauses (A), (B) or (C) shall file the details of monies 

accepted to the Registrar in Form DPT-3