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of <h1>South Indian Company's Fixed Deposits Advert Classified as Prospectus; Not Debentures Per Section 2(12) Unless Misused.</h1> A company in South India advertised for public fixed deposits to fund its expansion, prompting the Registrar of Companies to classify the advertisement as a prospectus under section 2(36), necessitating compliance with sections 56(3) and 60. The company argued that fixed deposits do not constitute debentures. Upon review, the Department, in consultation with the Ministry of Law, determined that while fixed deposit receipts are a recognized financing method, they should not be classified as debentures under section 2(12) unless evidence of widespread misuse emerges. Thus, fixed deposit receipts are considered securities but not debentures for the time being.
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