Form DPT-1

A company must issue an advertisement before inviting deposits from its members as per the provisions of the Companies Act, 2013 (‘Act’) and the Companies (Acceptance of Deposits) Rules, 2014 (‘Rules’). The Act and Rules provide that the companies proposing to invite deposits from its members must issue an advertisement or circular in the prescribed format, i.e. form DPT-1.

Applicability of Form DPT-1

Companies can accept/receive deposits from their members after passing a resolution in a general meeting after consultation with the Reserve Bank of India (RBI) subject to conditions prescribed in the Act and Rules. A public company having the prescribed net worth or turnover can accept deposits from persons other than its members after passing a resolution in a general meeting as per the Act and rules as the Central Government prescribes in consultation with the RBI.

The Act provides that any company intending to accept deposits from its members or a public company proposing to accept deposits from persons other than its members must issue a circular inviting such deposit. The company must issue the circular after it has passed the resolution to accept deposits in its general meeting.

The company intending to invite deposits from its members should issue the circular in the form of an advertisement in form DPT-1 to all its members by registered post or electronic mode. It must also publish the circular (form DPT-1) in an English and vernacular newspaper having circulation in the state where the company’s registered office is situated. It should also publish the circular on the company website.

Particulars of Form DPT-1

The circular or form DPT-1 should contain the following information:

• General information of the company
• Particulars of the deposit scheme
• Details of any outstanding deposits
• Financial position of the company
• A declaration by the directors 

The form DPT-1 should be issued on the authority of the Board of Directors of the company. It should be signed by a majority of the company directors as constituted when the board approved the circular/circular in the form of advertisement.  

You can download the sample format of the form DPT-1 as prescribed by the Act from below

Filing Form DPT-1 with the ROC

The companies inviting deposits from their members must file the circular, i.e. form DPT-1 with the Registrar of Companies (ROC) 30 days before the date of issue of the circular in the newspaper. The company can accept deposits from its members only after filing the form DPT-1 with the ROC and publishing it in one English and vernacular newspaper in the area where the company’s registered office is situated.

Consequences of Non-issuance of Form DPT-1

When a company intending to invite deposits from its members does not issue form DPT-1 to its members, forward it to the ROC and publish it in the newspaper, it will be liable to be punished with a fine not less than Rs.1 crore but may extend to Rs.10 crore. Every officer of such a company in default will be punished with imprisonment, which may extend to 7 years and with a fine of not less than Rs. 25 lakh but may extend to Rs.2 crore. 

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.
 

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