MCA amends deposit rules for startups, extends exemptions up to 10 yrs

Earlier, the limits of total deposit from members did not apply to a startup for five years from date of its incorporation

The corporate affairs ministry has amended the deposits rules, bringing them in line with the current start-up definition of department of promotion of industry and internal trade, to extend the exemptions up till 10 years from the date of incorporation of a company. 

With the new amendment, an amount of Rs 25 lakh or more received by a start-up through convertible note in a single tranche, which is convertible into equity shares or repayable within a period not exceeding 10 years from the date of issue, shall not be considered as deposits. Earlier, the time period was five years.