When should company issue of debenture certificate?

When should company issue of debenture certificate?

Private Companies which has not allotted Debentures in demat format shall issue and deliver the debentures certificates within a period of 6 months from the date of allotment.

What are debenture certificates?

Debenture Certificate is a document that certifies that the holder is the creditor of the company for the amount mentioned in the certificate. It is issued to all debenture holders. It is issued within a period of six months from the date of allotment of debentures.

How the debentures are issued?

The procedure of issuing debentures by a company is similar to the one followed while issuing equity stocks. The company starts by releasing a prospectus declaring the debenture issuance. The company can issue debentures at a par, at a premium or at a discount as explained below.

What is issuing debenture?

Share. A debenture is a marketable security (a type of investment) issued by a business or other organization to raise money for long-term activities and growth. It is a form of debt capital so it is accounted for as debt on the balance sheet of the issuing company.

Why do companies issue debentures?

Debentures. Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.

What is compulsory for new issue of debentures?

1. A company must allot the debenture certificates within 6 months from the date of allotment. 2. Stamp duty: Stamp duty on issuance of debentures is governed by the Indian Stamp Act, 1899 and is payable at the rate of .

How can I get debenture certificate?

Procedure to Issue Debentures

  1. Offer letter for private placement in Form No.
  2. Approval of Form No.
  3. Sanction of Debenture Trustee Agreement and appointment of a Debenture Trustee.
  4. Appointment of an expert for approval of increase of borrowing powers, if required.

What do mean by debenture?

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.

How do companies issue debentures?

A Board meeting is called to decide which kind of debenture is to be issued. The date, time and venue is fixed for the Extra-Ordinary general meeting. For the private placement, an offer letter is approved in form PAS-4. Within 60 days of allotment, Debenture trust deed shall be executed in form SH-12.

Who is the issuer of a debenture?

Debenture Issuer means the Guarantor. Debenture Issuer means Commercial Capital Bancorp, Inc., a savings and loan holding company incorporated in the State of Nevada, in its capacity as issuer of the Debentures under the Indenture, and any permitted successor under the Indenture.

Why would a company issue a debenture?

It gives the lender security over the borrower’s assets. Typically, a debenture is used by a bank, factoring company or invoice discounter to take security for their loans. A director who has advanced or lent money into their own company could take a debenture to secure the loan.

Why do banks issue debentures?

A bank debenture is a financial instrument issued by a bank to investors as a means of raising capital. On occasion, though, banks trying to raise money will reach out to average investors with long-term acknowledgments of debt that may be purchased on the open market.

When does a debenture certificate have to be issued?

The Board shall make allotment of debentures issued to the applicants and file return of allotment with the Registrar of Companies, in PAS-3. As per Section 56 (4) of the Companies Act, 2013 debenture certificate must be issued within a period of 6 months from the date of allotment.

Can a debenture be secured or unsecured?

Debenture is a debt acknowledged by a Company whether constituting a charge on the assets of the Company or not, whether convertible into shares at a later stage or not. Which means that a Debenture can be Secured or Unsecured, it can be Convertible (either wholly or partly) or Non-convertible.

Can a debenture be converted into a share?

As per Section 71 of the Companies Act, 2013, a company can issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption.

Can a private company list its debentures?

CAN A PRIVATE COMPANY LIST ITS DEBENTURES? Yes, a Private Company can issue bonds/debenture under the Companies Act 2013. There are regulations with respect to maintain asset cover, credit score rating, debenture redemption reserve, hold liquid assets for current maturities, etc.