Debenture holder as a member?

250 views 2 replies

Harshit Sardana

44 Points Joined July 2019

Member is Beneficial owner(#2(55))
And beneficial owner is dmat a/c holder acc to depository system.
So if we trade in debentures through our dmat, nsdl/cdsl maintain my record as registered owner. As per this, we will be beneficial owner of the co. and also the members. Where law tells us that debenture holders are not the members of the company?

Replies (2)

Harish choursiya

Student cs professional

249 Points Joined July 2016

There is quite difference between the debenture holder and equity holder

Refer section 88 for maintenance of register

Refer memorandum and article of the Company at the initial stage company formed either limited by share or guarantee

Most of the situation members are the primary holder of Company in terms of voting process etc. While debenture holders have only the specific rights over Interest payment etc. We can not allow them to participate as allow to members of the Company. Even company has no authority to treat both the holder of security i.e debenture and equity at same platform.

There are various situation whether it is appointment of Directors, Auditors or removal of it. Passing the special or ordinary resolution or entitle to share the profit by way of dividend . participate in further issuance of securities.

Chirag

Professional

1979 Points Joined December 2017

Debntureholder's are lender/ creditor of the company, Ya due to certain regulatory requirement they need to be listed ( Due to deposit regulations) or requriements under SEBI(ILDS) regulations, company repay you with interest and Redemption (Repayment of principal) at the end of tenure, While equity or prefrenece holder share Becomed part of the capital of the company which is never repaid (except winding up)...Company can go to banks/FI to get TL facilties ,but sometimes due to non acceptance of their terms /period / security charged/ Rate of interest, Company found it beneficial to go for debentures....( Secured or unsecured)....Its well recognised under law.