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Discussion > Corporate Law >

Can Pvt Ltd Company Issue Debentures

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[ Scorecard : 26]
Posted On 23 August 2008 at 23:13 Report Abuse

Hi All,

Can any one clarify me on the issue of debentures by Private Limited companies without forming a Debenture Trust.

I can raise loans fron my friends up to 1 cr but cannot bring it as Share Capital.Because i dont want them to be in company as share holders and on the other hand i dont have enough money for my expansions.

But my friends are happy with the returns itself with share holder benefits. 

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Chief Financial Officer and Co

[ Scorecard : 11283]
Posted On 24 August 2008 at 09:28

Fully Secured  debentures (by mortgage of immovable property) can be raised on pvt placement basis. As it is secured debenture to a group of persons, you will not be able to avoid trust.

CA. Amit Daga
Finance Controller CA. CS. CFA. CIFRS. M.COM.

[ Scorecard : 8946]
Forum Moderator
Posted On 24 August 2008 at 11:48

Srinivas is correct,Trust is always formed for the benefit and rights for the holders..so u cant avoid the trust


[ Scorecard : 26]
Posted On 25 August 2008 at 14:25

when the pvt company issues shares and debentures to the public.  Anyone can suggest the company rules????????


[ Scorecard : 26]
Posted On 25 August 2008 at 23:16

Then in what form can i raise the amount, a private limited cannot raise loans from outside persons, apart from Directors of the company.

People are ready to invest in my company, beccause they know the business will do good in the future.

Can i take them as preference share holders at fixed coupon rate of return.

Please advice me in this regard, i have people to invest 1 crore in my investments firm ready.

Posted On 26 August 2008 at 19:31

One way to deal with this matter is to make those friends members of your company by alloting them say just 1 share or 10 shares by transfer from existing shareholders. Transfer of such nominal amount of shares will not dilute shareholding of existing shareholders.
After transfer as your friends become members of the co., they can bring in deposits to the company from time to time of any time. And no compliances are required for such deposits. It is just a form of unsecured loan from shareholders. And can be repaid anytime.




Posted On 12 September 2008 at 16:30

my share capital is 10 lakh can u guide me how much payment i can take ,we are 2 directors and i am appointed as managing director tese year our turn over will be around 3 crore

Lineesh James
Company Secretary

[ Scorecard : 30]
Posted On 17 September 2008 at 11:31

Originally posted by :Guest
" If yours is Private limited Company, take whatever you want "


Posted On 25 September 2008 at 12:09

how much loan can a private limited company borrow

Lineesh James
Company Secretary

[ Scorecard : 30]
Posted On 25 September 2008 at 12:45

Originally posted by :Guest
" how much loan can a private limited company borrow "


As much as it can get

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