Q.Write short notes on:

Two of the extra safeguards Section 76 layers onto a public deposit invitation, over and above what a member-deposit invitation needs.

1. Deposit Trust Deed: Under Section 76, read with the Companies (Acceptance of Deposits) Rules, 2014, an eligible company inviting deposits from the public must appoint one or more trustees for depositors before making the invitation, so that depositors' interests are represented by an independent party for as long as the deposits remain outstanding. This appointment is made effective by executing a Deposit Trust Deed, in the prescribed Form DPT-2, and the deed must be executed at least seven days before the circular or advertisement inviting deposits is actually issued — the trustee's protection must be in place before the public is invited to deposit money at all, not arranged afterwards.
2. Credit Rating: An eligible company must, before inviting deposits from the public, obtain a credit rating in respect of the deposits it proposes to invite from a recognised credit rating agency, and disclose that rating to prospective depositors at the time of the invitation. Crucially, this is not a one-time requirement taken at the start and then forgotten — the company must obtain a fresh credit rating every year for as long as the deposits remain outstanding, so a depositor's picture of the company's creditworthiness stays current through the entire tenure of the deposit, not frozen at the date the money was first invited. …

Students often state the credit rating is obtained 'once, before the invitation' and stop there, missing the annual-renewal requirement for as long as deposits remain outstanding. The Deposit Trust Deed's 7-day …