TOPIC 46: QUICK REFERENCE TO “Debenture”

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Quick Reference to "Debenture" :-
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1. In General sense, Debenture is an "Acknowledgement of Debt."
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2. "Interest" is the ultimate return on Debenture.
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3. It is not allowed to issue Debentures carrying voting rights.
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4. Debenture is a part of Owed/ Borrowed Capital.
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5. Debenture can be Secured, Unsecured, Redeemable, Convertible.
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6. Special Resolution in General meeting is require for Issue of Debentures.
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7. Debentures can be issued at Discount.
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8. Secured Debentures should he Redeemed within 10 years from the date of issue of Debentures. (There are Certain exemptions also)
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9. Appointment of Debenture Trustee is mandatory if Company wants to issue Prospectus for Issue of Debentures to more than 500 person.
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10. For Issue of Non-Convertible Debentures, the company is require to follow SEBI ( Issue and Listing Debt Securities) Regulations, 2008.
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11. For Issue of Convertible Debentures,
The company is require to follow SEBI (ICDR) Regulations, 2009
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12. Debenture Redemption Reserve is require to create Redemption of Debentures (Not Applicable for Banking Sector Company, All india Financial Institutions).
Rate of DRR is 25%
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13. E-Form CHG-9 is require to file in Case of Secured Debentures.
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14. The certificate of Debenture Should be issued within 6 months from the date of allotment of Debenture.
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15. Legal Provision:-
#Section 2(30), 71. Of Companies Act, 2013.
# Rule 18 of Company (Share Capital and Debentures) Rules, 2014.
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16. Interest on the debenture is a tax deductible expenditure as per Income tax act.
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Regards
ACA SOURAV BAGARIA