Company law

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P.Abirami (Querist)
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15 March 2012 Individuals/statuatory auditors or Practicising Professionals like CA, Company secretary can act as a Debenture Trustee for an unlisted Public Company

Ajay Mishra

Ajay Mishra (Expert)
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15 March 2012 Hi

Section 117B of the Act deals with the terms of appointment and duties of the debenture trustee.

Compulsory appointment of debenture trustees.—No company shall issue a prospectus or a letter of offer to the public for subscription of its debentures, unless the company has, before such issue, appointed one or more debenture trustees for such debentures and the company has, on the face of the prospectus or the letter of offer, stated that the debenture trustee or trustees have given their consent to the company to be so appointed:
Provided that no person shall be appointed as a debenture trustee, if he—
(i) beneficially holds shares in the company;
(ii) is beneficially entitled to moneys which are to be paid by the company to the debenture trustee;
(iii) has entered into any guarantee in respect of principal debts secured by the debentures or interest thereon.

An Individual can appoint as debenture trustee, but statutory and company secretary of the company can not appoint as trustee.

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