Updated: 16 September 2026
Definitions under Section 2(30) to 2(39) of the Companies Act, 2013
Section 2 of the Companies Act, 2013 contains definitions used throughout the Act. Clauses 2(30) to 2(39) cover ten important expressions: debenture, deposit, depository, derivative, director, dividend, document, employees' stock option, expert and financial institution.
Section 2(30): Debenture
Meaning: "debenture" includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not.
The proviso excludes (a) instruments referred to in Chapter III-D of the Reserve Bank of India Act, 1934; and (b) such other instruments as may be prescribed by the Central Government in consultation with the Reserve Bank of India, when issued by a company.
In practical terms, the definition is broad and focuses on an instrument evidencing company debt. A debenture need not necessarily be secured by a charge. The statutory exclusion for specified money-market instruments should be checked before treating an instrument as a debenture.
For provisions governing issue of debentures, also see Section 71 of the Companies Act, 2013 and the applicable rules.
Section 2(31): Deposit
Meaning: "deposit" includes any receipt of money by way of deposit or loan or in any other form by a company, but excludes categories of amounts prescribed in consultation with the Reserve Bank of India.
The definition is intentionally wide. Whether a receipt is legally treated as a deposit therefore depends not only on Section 2(31), but also on the Companies (Acceptance of Deposits) Rules, 2014, as amended, which identify excluded categories and prescribe conditions. Sections 73 to 76A contain the principal statutory framework for acceptance and repayment of deposits by companies.
Section 2(32): Depository
Meaning: "depository" means a depository as defined in Section 2(1)(e) of the Depositories Act, 1996.
The Companies Act adopts the meaning from the Depositories Act, 1996. The cross-reference is important where company securities are held, transferred or dealt with in dematerialised form.
Section 2(33): Derivative
Meaning: "derivative" means the derivative as defined in Section 2(ac) of the Securities Contracts (Regulation) Act, 1956.
This is another incorporated definition. For the operative meaning and any amendments, refer to the Securities Contracts (Regulation) Act, 1956 on India Code.
Section 2(34): Director
Meaning: "director" means a director appointed to the Board of a company.
The definition links the status of director to appointment to the company's Board. Detailed provisions on appointment, qualifications, disqualifications, duties and vacation of office are contained principally in Chapter XI of the Companies Act, 2013.
Section 2(35): Dividend
Meaning: "dividend" includes any interim dividend.
Accordingly, references to dividend in the Act may extend to interim dividend unless the context requires otherwise. Section 123 and related provisions govern declaration and payment of dividend.
Section 2(36): Document
Meaning: "document" includes summons, notice, requisition, order, declaration, form and register, whether issued, sent or kept under the Companies Act, under another law, or otherwise, and whether maintained on paper or in electronic form.
The definition expressly recognises electronic records as documents. This is relevant to statutory filings, registers, notices and corporate records maintained or communicated electronically.
Section 2(37): Employees' Stock Option
Meaning: "employees' stock option" means an option given to directors, officers or employees of a company, or of its holding or subsidiary company or companies, giving them the benefit or right to purchase or subscribe for shares of the company at a future date at a pre-determined price.
An ESOP is therefore an option or right relating to a future purchase or subscription of shares; it is not the same as an immediate allotment of shares. Section 62(1)(b), the Companies (Share Capital and Debentures) Rules, 2014 and, for listed entities, applicable SEBI requirements should also be considered.
Section 2(38): Expert
Meaning: "expert" includes an engineer, a valuer, a chartered accountant, a company secretary, a cost accountant and any other person having the power or authority to issue a certificate under any law for the time being in force.
The definition is inclusive rather than exhaustive. It becomes important where the Act attaches responsibility to expert reports, statements, certificates or opinions, including material connected with prospectuses.
Section 2(39): Financial Institution
Meaning: "financial institution" includes a scheduled bank and any other financial institution defined or notified under the Reserve Bank of India Act, 1934.
The clause expressly includes scheduled banks and links the wider category to the Reserve Bank of India Act, 1934. Where the status of a particular institution matters, the relevant RBI Act provisions and notifications should be checked.
Quick reference
2(30) Debenture; 2(31) Deposit; 2(32) Depository; 2(33) Derivative; 2(34) Director; 2(35) Dividend; 2(36) Document; 2(37) Employees' stock option; 2(38) Expert; 2(39) Financial institution.