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Can Pvt Ltd Company Issue Debentures

GOPI (FINANCE & INVESTMENTS) (26 Points)

23 August 2008

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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15 Replies

S.Srinivasaraghavan (Chief Financial Officer and Co) (11318 Points)
Replied 24 August 2008

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. ) (9017 Points)
Replied 24 August 2008

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

chandru (accountant) (26 Points)
Replied 25 August 2008

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

GOPI (FINANCE & INVESTMENTS) (26 Points)
Replied 25 August 2008

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.

(Guest)

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.

(Guest)

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) (30 Points)
Replied 17 September 2008

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

(Guest)

how much loan can a private limited company borrow

Lineesh James (Company Secretary) (30 Points)
Replied 25 September 2008

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

As much as it can get

amit handa (F.C.A D.I.S.A (I.C.A.I)) (26 Points)
Replied 01 May 2009

You can yourself borrow the amount from your friends and than introduce it to the company as loans from yourself. You can have the interest from the company and can pay that interest to the lenders.

Jetha Punjabi (Service) (22 Points)
Replied 07 May 2009

Originally posted by :Guest
"	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.	"