Section 53 of Companies Act, 2013 - A Classic Trap

Most of you think you know this one, but trust me, it's a common question in CLAT that can trip even the most confident students. The question is: 'Can a private company make a public deposit?' Sounds simple, but here's the twist - it seems like a 'yes' or 'no' question. But most people get it wrong by not considering the nuances of Section 58A of the Companies Act, 2013.

They just remember that private companies are not allowed to invite deposits from the public. But, Section 53 comes into play here - it gives a special permission to private companies to make public deposits for a specified period, for a specific purpose, and with some conditions. So, the correct answer is not a straightforward 'no', but rather 'it can, but only under certain conditions'.