Issue of debentures
This query is : Resolved
21 December 2012
In case of issue of debentures by a Private Limited Company, whether debenture Trustee is required to be appointed.?? Kindly quote sec
21 December 2012
Hi
ISSUE OF DEBENTURES BY A PRIVATE LIMITED COMPANY.
POSITION IN LAW:
(a) 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.
(b) 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.
(c) Hence, the Private Company must issue Debentures only as a Secured Debenture.
Yes, the provisions of section 117, 117A, 117B and 117C will apply to private limited company.
ISSUE OF DEBENTURES BY A PRIVATE LIMITED COMPANY.
POSITION IN LAW:
(a) 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.
(b) 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.
(c) Hence, the Private Company must issue Debentures only as a Secured Debenture.
Yes, the provisions of section 117, 117A, 117B and 117C will apply to private limited company.
21 December 2012
Board Resolution: DECLARATION OF TRUST:
The board discussed the requirement of appointment of trustees for the
issue of Debentures as required under Section 117A of the Companies
Act, 1956. Thereafter it was:
RESOLVED THAT the Company do and hereby constitute a Trust for the purpose of issue of Debentures and the Trustees be appointed who shall act so in connection with the debentures to be issued and allotted and
shall hold the property of the company in trust for the timely and due payment of interest and redemption of debentures.
Board Resolution: DECLARATION OF TRUST:
The board discussed the requirement of appointment of trustees for the
issue of Debentures as required under Section 117A of the Companies
Act, 1956. Thereafter it was:
RESOLVED THAT the Company do and hereby constitute a Trust for the purpose of issue of Debentures and the Trustees be appointed who shall act so in connection with the debentures to be issued and allotted and
shall hold the property of the company in trust for the timely and due payment of interest and redemption of debentures.
21 December 2012
Board Resolution: APPOINTMENT OF TRUSTEES:
The Board discussed the matter relating to appointment of Debenture Trustees and decided to appoint ________ as the Trustees for the Debentures. Thereafter, it was
RESOLVED THAT the Company do and hereby appoint M/s __________
, as the Trustees who have conveyed in writing their acceptance to act as
Trustees for the issue of ___% ________ of Rs. _____ each amounting to Rs. ______/- .
Board Resolution: APPOINTMENT OF TRUSTEES:
The Board discussed the matter relating to appointment of Debenture Trustees and decided to appoint ________ as the Trustees for the Debentures. Thereafter, it was
RESOLVED THAT the Company do and hereby appoint M/s __________
, as the Trustees who have conveyed in writing their acceptance to act as
Trustees for the issue of ___% ________ of Rs. _____ each amounting to Rs. ______/- .
21 December 2012
Board Resolution:APPROVAL OF TRUST DEED:
The Chairman placed before the Board the draft Trust Deed to be entered with the Debenture Trustees of the Company for the issue of ___% __ debentures of Rs. ____/- each. The Board then after discussion
RESOLVED THAT the Debenture Trust Deed as per the draft placed before this meeting and initialed by the Chairman for the purpose of identification, be and is hereby approved and that Mr. __________ , Director and Mr. _________, Director be and are hereby authorised to execute the same on behalf of the Company.
Board Resolution:APPROVAL OF TRUST DEED:
The Chairman placed before the Board the draft Trust Deed to be entered with the Debenture Trustees of the Company for the issue of ___% __ debentures of Rs. ____/- each. The Board then after discussion
RESOLVED THAT the Debenture Trust Deed as per the draft placed before this meeting and initialed by the Chairman for the purpose of identification, be and is hereby approved and that Mr. __________ , Director and Mr. _________, Director be and are hereby authorised to execute the same on behalf of the Company.
21 December 2012
@ mr. ajay mishra
i m asking
its compulsory in private co. to appoint a debentures trustee ?
i m asking
its compulsory in private co. to appoint a debentures trustee ?
21 December 2012
@Ms. Arti Pradhan.....
The Companies Act is not giving any exemption from creating trustee.
The Companies Act is not giving any exemption from creating trustee.
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