Debentures
This query is : Open
10 August 2009
Dear Members,
Can a private limited co. issue debentures & what r the requirements by Pvt Ltd. Co. to do so.
Hoping a positive feed back from your end
Thanks
Amit
Can a private limited co. issue debentures & what r the requirements by Pvt Ltd. Co. to do so.
Hoping a positive feed back from your end
Thanks
Amit
10 August 2009
.
Ankur Garg
(Expert)
10 August 2009
Hi Amit,
Yes a private limited company can issue debenture but such Private Company must issue Debentures only as a Secured Debenture.
There are 2 reasons behind issuing Secured Debenture only:
1. Under the Companies (Acceptance of Deposit) Rules, 1975 “any amount raised by issue of debentures (including convertible debentures) secured by the mortgage of any immovable property of the company and that the market value of the immovable property secured is higher than the amount of debentures issued” is not considered to be a DEPOSIT.
2. Under Section 3(1)(d) of the Act, a Private Company is prohibited from accepting Deposit from persons other than its Directors, Members and their relatives.
Regards
Yes a private limited company can issue debenture but such Private Company must issue Debentures only as a Secured Debenture.
There are 2 reasons behind issuing Secured Debenture only:
1. Under the Companies (Acceptance of Deposit) Rules, 1975 “any amount raised by issue of debentures (including convertible debentures) secured by the mortgage of any immovable property of the company and that the market value of the immovable property secured is higher than the amount of debentures issued” is not considered to be a DEPOSIT.
2. Under Section 3(1)(d) of the Act, a Private Company is prohibited from accepting Deposit from persons other than its Directors, Members and their relatives.
Regards
Message likes :
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Ankur Garg
(Expert)
10 August 2009
APPROVALS REQUIRED:
The following approvals are required to be obtained by the Company through resolution in board meeting:
1. Board approval for issue of Debentures under Section 292(1)(b).
2. Board approval for Creation / Declaration of Trust
3. Board approval for Appointment of Debenture Trustees (Section 117B)
4. Board Approval of Draft Trust Deed
5. Board Approval of the Form of Debenture Certificate.
6. Letter from Trustees Consent from the Debenture Trustees to act as Trustees.
No approvals are required to be obtained under Section 293(1)(a) and (d) since, the Section does not apply to Private Limited Companies, unless it is a Subsidiary of a Public Company.
The following approvals are required to be obtained by the Company through resolution in board meeting:
1. Board approval for issue of Debentures under Section 292(1)(b).
2. Board approval for Creation / Declaration of Trust
3. Board approval for Appointment of Debenture Trustees (Section 117B)
4. Board Approval of Draft Trust Deed
5. Board Approval of the Form of Debenture Certificate.
6. Letter from Trustees Consent from the Debenture Trustees to act as Trustees.
No approvals are required to be obtained under Section 293(1)(a) and (d) since, the Section does not apply to Private Limited Companies, unless it is a Subsidiary of a Public Company.
10 August 2009
Dear Si
thanx alot for such info, Actually i wanna know wat r the Preliminaryrequiements to do so by the co., Is it thu MOA & AOA or normally any pvt ltd. co. can issue such debentures?
With egards
Amit
thanx alot for such info, Actually i wanna know wat r the Preliminaryrequiements to do so by the co., Is it thu MOA & AOA or normally any pvt ltd. co. can issue such debentures?
With egards
Amit
Ankur Garg
(Expert)
10 August 2009
Specific mention in MOA & AOA is not required for issuing deb by a pvt company.
10 August 2009
Pl let me know da procedure / provide me da notes related to Step by step procedure related to Debentures & Prefrence Shae Capital for Ltd & Pvt. ltd. Cos. becuz i just wanna ubderstand both da terms!!!
Eagely waiting 4 ur reply in this regard.
Thanks
Amit
Eagely waiting 4 ur reply in this regard.
Thanks
Amit
10 August 2009
Pl let me know da procedure / provide me da notes related to Sep by step procedure related to Debentures & Prefrence Shae Capital becuz i just wanna ubderstand both da terms!!!
Eagely waiting 4 ur reply in this regard.
Thanks
Amit
Eagely waiting 4 ur reply in this regard.
Thanks
Amit
Ankur Garg
(Expert)
10 August 2009
Fund raising for the business through the issue of debenture etc is a general practice/right of a private company. However in certain times bank can demand specific power in the company MOA & AOA.
For safety side amend your AOA & MOA suitably to insert the power to issue the debenture.
For safety side amend your AOA & MOA suitably to insert the power to issue the debenture.
10 August 2009
Dea Sir,
Such Deb. should be issued amonsgst Directos & membes of Pvt. Ltd Co. Only ?
Such Deb. should be issued amonsgst Directos & membes of Pvt. Ltd Co. Only ?
10 August 2009
Dea Sir,
Such Deb. should be issued amonsgst Directos & membes of Pvt. Ltd Co. Only ?
Such Deb. should be issued amonsgst Directos & membes of Pvt. Ltd Co. Only ?
Ankur Garg
(Expert)
10 August 2009
If you need resolution then let me know your mail id through PM.
Message likes :
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10 August 2009
thnx & pl send me the notes at:-
ak12_gupta@yahoo.co.in
Futher, Pl explain the step by step knowledge of Debentures & Pref. share, If u Can
Thanks
Amit
ak12_gupta@yahoo.co.in
Futher, Pl explain the step by step knowledge of Debentures & Pref. share, If u Can
Thanks
Amit
Ankur Garg
(Expert)
10 August 2009
Check your mail ID. I have send u desired file with sample resolutions to be passed in board meeting.
Message likes :
1 times
10 August 2009
Dear Sir,
How can we got the debentures fom ROC ?
Shud v paid any duty to ROC for regd. of such debentures like shares ?
Rgds
Amit
How can we got the debentures fom ROC ?
Shud v paid any duty to ROC for regd. of such debentures like shares ?
Rgds
Amit
10 August 2009
Dear Sir,
Thanx for resolutions
pl reply as per following queries :-
1) How can we got the debentures fom ROC ?
2) Shud v paid any duty to ROC for regd.
of such debentures like shares ?
3)in pvt. co. the debentures should be issued amoungst members & directos only ?
Rgds
Amit
Thanx for resolutions
pl reply as per following queries :-
1) How can we got the debentures fom ROC ?
2) Shud v paid any duty to ROC for regd.
of such debentures like shares ?
3)in pvt. co. the debentures should be issued amoungst members & directos only ?
Rgds
Amit
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