Welcome to Scribd. Sign in or start your free trial to enjoy unlimited e-books, audiobooks & documents.Find out more
Download
Standard view
Full view
of .
Look up keyword
Like this
3Activity
0 of .
Results for:
No results containing your search query
P. 1
ISSUE OF DEBENTURES BY A PVT LTD COMPANY

ISSUE OF DEBENTURES BY A PVT LTD COMPANY

Ratings: (0)|Views: 410|Likes:
Published by Soumitra Chawathe
Procedural aspects on Issue of Debentures by a pvt ltd Company
Procedural aspects on Issue of Debentures by a pvt ltd Company

More info:

Categories:Types, Business/Law
Published by: Soumitra Chawathe on Sep 11, 2010
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

01/14/2011

pdf

text

original

 
ISSUE OF DEBENTURES BY A PRIVATE LIMITED COMPANY
STEPS INVOLVED IN ISSUE OF DEBENTURE1. POSITION IN LAW:
(a) Under the Companies (Acceptance of Deposit) Rules, 1975 “any amount raised byissue of debentures (including convertible debentures) secured by the mortgage of anyimmovable property of the company and that the market value of the immovableproperty secured is higher than the amount of debentures issued” is not considered tobe 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.
2. APPROVALS:
The following approvals are required to be obtained by the Company:
Approval Level Nature of approval
Board For issue of Debentures under Section292(1)(b).Board Creation / Declaration of TrustBoard Appointment of Debenture Trustees(Section 117B)Board Approval of Draft Trust DeedBoard Approval of the Form of DebentureCertificate.Letter from Trustees Consent from the Debenture Trustees toact as Trustees.
 
No approvals are required to be obtained under Section 293(1)(a) and (d) since, theSection does not apply to Private Limited Companies, unless it is a Subsidiary of aPublic Company.
 
 
SUGGESTED RESOLUTIONS FOR THE ABOVE:APPROVAL OF BOARD TO ISSUE DEBENTURES:RESOLVED THAT
pursuant to Section 292, the Company do and hereby issue _________ debentures of Rs. ____/- each
DECLARATION OF TRUST:
The board discussed the requirement of appointment of trustees for the issue ofDebentures as required under Section 117A of the Companies Act, 1956.Thereafter it was:
RESOLVED THAT
the Company do and hereby constitute a Trust for thepurpose of issue of Debentures and the Trustees be appointed who shall act soin connection with the debentures to be issued and allotted and shall hold theproperty of the company in trust for the timely and due payment of interest andredemption of debentures.
 
APPOINTMENT OF TRUSTEES:
The Board discussed the matter relating to appointment of Debenture Trusteesand decided to appoint ________ as the Trustees for the Debentures.Thereafter, it wasRESOLVED THAT the Company do and hereby appoint M/s __________ , asthe Trustees who have conveyed in writing their acceptance to act as Trusteesfor the issue of ___% ________ of Rs. _____ each amounting to Rs. ______/-.
APPOINTMENT OF TRUSTEES:
The Board discussed the matter relating to appointment of Debenture Trusteesand decided to appoint ________ as the Trustees for the Debentures.Thereafter, it wasRESOLVED THAT the Company do and hereby appoint M/s __________ , asthe Trustees who have conveyed in writing their acceptance to act as Trusteesfor the issue of ___% ________ of Rs. _____ each amounting to Rs. ______/-.
 
APPROVAL OF TRUST DEED:
The Chairman placed before the Board the draft Trust Deed to be entered withthe Debenture Trustees of the Company for the issue of ___% __ debentures ofRs. ____/- each. The Board then after discussion
R
ESOLVED THAT
the Debenture Trust Deed as per the draft placed before thismeeting and initialed by the Chairman for the purpose of identification, be and ishereby approved and that Mr. __________ , Director and Mr. _________,Director be and are hereby authorized to execute the same on behalf of theCompany.
2. ALLOTMENT
Since, the Company proposes to place the Debenture privately, it is suggested that aLetter of Offer is also made which would be circulated amongst the target buyers. Thedraft letter of offer is also required to be approved by the Board. The conditions relatingto the payment for subscription, the Security, the rate of interest on the Debentures andthe period by which the Debentures would be redeemed would have to be specified.On receipt of the application from the person(s) subscribing for the Debentures, theBoard needs to make the allotment.
SUGGESTED RESOLUTION FOR ALLOTMENT OF DEBENTURES:
The Chairman informed the Board that ____ has agreed to subscribe to theDebentures of the Company and has paid Rs. ___/- as specified in the Letter ofOffer. He also informed that as per the Letter of Offer the Debentures arerequired to be alloted on or before __th _____, 200_. After deliberation theBoard passed the following resolution:
R
ESOLVED THAT
the Board do and hereby constitute and allot to _____, __ non-convertible debentures of Rs. __/- each.
R
ESOLVED FURTHER THAT
the terms of issue of the aforesaid debentures allottedto _________ be and is hereby confirmed as follows:

Activity (3)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
nairskrmr liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->