Hi,
Can any one please provide me the procedures and compliances required for debentures - convertible, non- convertible, optional debentures in a pvt ltd company.Kindly provide at the earliest.
Regards
namrata
namrata (company secretary ) (422 Points)
06 August 2010Hi,
Can any one please provide me the procedures and compliances required for debentures - convertible, non- convertible, optional debentures in a pvt ltd company.Kindly provide at the earliest.
Regards
namrata
vivek
(CS)
(751 Points)
Replied 06 August 2010
A private ltd. comp. can issue only secured debentures, 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. APPROVALS:
The following approvals are required to be obtained by the Company:
Approval Level Nature of approval
Board For issue of Debentures under Section 292(1)(b).
Board Creation / Declaration of Trust
Board Appointment of Debenture Trustees (Section 117B)
Board Approval of Draft Trust Deed
Board Approval of the Form of Debenture Certificate. 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.
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