Question : Which company prohibits any invitation or acceptance of deposits from a person other than its member, directors, or their relatives?
Option 1: Public Company
Option 2: Private Company
Option 3: Both 1 and 2
Option 4: None of the above
Answer (1)
15th Jan, 2024
Correct Answer: Private Company
Solution : Private companies, as defined under the Companies Act, 2013, are prohibited from inviting or accepting deposits from persons other than their members, directors, or their relatives. Private companies are restricted from raising funds by accepting deposits from the public as a measure to safeguard the interests of depositors and maintain financial stability within the company. Hence, the correct answer is option 2.
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