Please find attached notification issued by MCA/RBI. The brief summary of the notification is mentioned below:
|2||Subject||Companies Acceptance of Deposit Amendment Rules ,2020|
''start-up company” means a private company incorporated under the Companies Act, 2013 or Companies Act, 1956 and recognized as such in accordance with notification number "G.S.R. 127 (E), dated the 19th February, 2019 issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry
1) Amount of 25 lacs or more received by a startup by way of convertible note which is convertible into equity or repayable within 5 years from issue date was not treated as a deposit. This time limit of 5 years has now been extended to 10 years. This means that a startup can raise money in the form of convertible notes which are convertible or reputable up to 10 years.
2) the limits of total deposit from members doesn’t apply to a private company which is a startup for five years from date of its incorporation- this time period has now been amended to 10 years. This means that a startup private co can accept deposits from its members without any limit till 10 years from its incorporation.
|6||Impact||More relaxations given to startup Companies to promote ease of doing business.|