Q.Justify the following statement:
All companies cannot accept deposits from the public.

The right to accept deposits from the public is not open to every company. Only an eligible public company that fulfils the conditions of Section 76 can do so, which justifies the statement.

Deposits are one source of borrowed capital, but because public money is involved, the Companies Act, 2013 strictly limits who may accept it.

Why all companies cannot accept public deposits:

• Members' deposits vs public deposits: Under Section 73, a company (including a private company) may accept deposits from its own members subject to conditions. But accepting deposits from the general public is a separate and more restricted matter.
• Only an eligible company under Section 76: Section 76 permits only an eligible public company to accept deposits from the public. Such a company must meet prescribed limits of net worth or turnover and obtain a special resolution of members.
• Compliance conditions: An eligible company must also fulfil requirements such as credit rating, deposit insurance/repayment reserve, filing of a circular, and other safeguards prescribed by the rules. …