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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


Team Careers360 14th Jan, 2024
Answer (1)
Team Careers360 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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