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Debentures: Investment Law 5 Year Semanti Choudhury
Debentures: Investment Law 5 Year Semanti Choudhury
INVESTMENT LAW
5 TH Y E A R
SEMANTI CHOUDHURY
What is a Debenture?
As per Sec.2(30) of the CA,2013,”Debenture” includes
debenture stock, bonds or any other instrument of the
company evidencing a debt, whether constituting a
charge on the assets of the company or not.
A company may issue debentures with an option to
convert such debentures into shares, either wholly or
partly at the time of redemption, which shall be
approved by a special resolution passed at a general
meeting.
No company shall issue any debentures
carrying any voting rights.
Section 71 + Companies (Share Capital and
Debentures) Rules, 2014
Conditions for issue of secured
debentures
The company shall not issue secured debentures, unless it complies
with the following conditions, namely:-
1.Term of Debentures:
An issue of secured debentures may be made, provided the date of
its redemption shall not exceed 10 years from the date of issue.
If a company engaged in the setting up of infrastructure projects
may issue secured debentures for a period exceeding 10 years but
not exceeding 30 years
2.Secured by charge: