LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Can llp issue debentures?

Suresh Arumilli (1 Points)

08 May 2019

Can LLP Issue Debentures? Please advise if there is any alternate option to issue capital instruments in LLP.

Reply
Follow
Share

3 Replies

Shrikant (Associate) (350 Points)
Replied 08 May 2019

Debentures cannot be issued by a LLP. Definition of debentures as per section 2 (30) of the Companies Act, 2013 gives power only to company for the issuance of the same.

Definition is reproduced below for your reference,

"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;

Provided that—

(a) the instruments referred to in Chapter III-D of the Reserve Bank of India Act, 1934; and

(b) such other instrument, as may be prescribed by the Central Government in consultation with the Reserve Bank of India, issued by a company,

shall not be treated as debenture;]

Shivam RC (Student) (23683 Points)
Replied 08 June 2019

No....

Debentures can be issued only by Company.

Shrijay Sheth (Co-Founder) (2692 Points)
Replied 14 June 2019

LLP cannot issue debentures like a company. An LLP can only have capital brought by its partners or can take loan from bank or financial institutions.