TOPIC 10: QUICK REFERENCE TO “Debenture Trustee”

.
Quick Reference to " Debenture Trustee":-
.
Legal Provision:-.
Section 71 of Companies Act, 2013.
..
Points:-.
1. Basically, The Debenture Trustee Protects the Denbenture holder against non payment of redemption amount at the maturity date in case of secured debentures.
.
2. If the Default is made by the company, then Trustee can realise the security without aid of court.
.
3. The Appointment of Debenture Trustee is compulsorily required if company issues prospectus to more than 500 persons.
.
4. The Company shall execute a Debenture trust deed in form no. SH-12 within 3 months from the closure of the issue.
.
5. Basically, Title deeds of the morgaged property prevents the company from misusing title deeds for any other purpose.
.
6. It is not allowed for Debenture Trustee to beneficially hold shares in the Company.
.
7. Debenture Trustee should not be KMP or Director or Promoter or officer or employee of the Company.
.
8. Debenture Trustee should not be indebted to the company or has not given any guarantee for specific debt.
.
9. Debentures Trustee is liable for breach of trust.
.
10. Debentures Trustees has power that the property morgaged is kept insured and properly maintained in a good condition.
.
11. Basically, Debentures Trustee are Safeguard to the Interest of Debenture Holder.
.
12. The Debenture Trustee can call for Performance Report of the Company Periodically.
 .
 ...
REGARDS
ACA SOURAV BAGARIA