- What is Debenture company law?
- Can private company accept deposits?
- Can a private company issue unsecured debentures under Companies Act 2013?
- Can one person company issue debentures?
- Why do companies issue debentures?
- Is appointment of debenture trustee compulsory?
- Are debentures considered as deposits?
- Can we issue unsecured debentures?
- Can a company issue unsecured non convertible debentures?
- Are unsecured debentures treated as deposits?
- What is difference between secured and unsecured NCD?
- What is a specific debenture?
- Who can issue a debenture?
- Can a listed company issue unlisted debentures?
- How do I sell NCD before maturity?
- What is the meaning of non convertible debentures?
- Can OPC raise funds?
- What is not a deposit?
What is Debenture company law?
A debenture is one of ways of company borrowing where the company agrees to repay the debt where may also be a charge over the company’s assets to ensure the repayment of this debt.
Definition of Debenture from legal aspects: The word ‘debenture’ has been derived from a Latin word ‘debere’ which means to borrow..
Can private company accept deposits?
Private companies can accept deposits from its members to the extent of 100% of its paid up capital, securities premium and free reserves without complying with the conditions as stated in section 73(2) (a) to (e).
Can a private company issue unsecured debentures under Companies Act 2013?
Section 71: – A Company may issue debentures with an option to convert into shares, wholly or partly, at the time of redemption but cannot issue debentures with voting rights. … If there is any default with the provisions of this section then the Company and the Officers shall be liable to fine or imprisonment or both.
Can one person company issue debentures?
The private company is in an advantageous position as it can issue debentures and accept deposits from the public. 3. Even though the idea of OPC is to enable an individual to start his own business without the need to have a partner but, procedurally a suitable nominee has to be selected.
Why do companies issue debentures?
Why do company issue debentures, when they can borrow money from Bank. … When bank lend money they generally place restriction on how that money can be used. ex- borrowed fund can be used only for capital expenditure or they limit companies ability to raise additional funds till this loan is repaid. etc.
Is appointment of debenture trustee compulsory?
As per the provisions of companies act, appointment of debenture trustee is mandatory. However, issue of debentures / bonds with maturity of 18 months or less are exempt from the requirement of appointment of Trustee.
Are debentures considered as deposits?
debentures and non-convertible debentures are issued to a company or a foreign body, then these are not to be classified as deposits. However, if such debentures are issued to a resident, then these will be considered as deposits unless the debentures are listed on the stock exchange.
Can we issue unsecured debentures?
Yes. Pursuant to Section 71 of the Companies Act, 2013, a Private Limited Company can issue unsecured debentures with an option to convert such debentures into shares, either in whole or in part at the time of redemption. … What are debentures?
Can a company issue unsecured non convertible debentures?
An NCD can either be secured or unsecured. A secured NCD is backed by the issuing company’s assets. This means that the company has to fulfil its debt obligation whatsoever. However, that’s not the case for unsecured NCDs.
Are unsecured debentures treated as deposits?
However, an unsecured debenture shall only be exempt from the purview of deposits as long as it is compulsorily convertible within 10 (ten) years. This would mean that non-convertible unsecured debentures would be considered as deposits.
What is difference between secured and unsecured NCD?
The NCDs can be secured or unsecured. A secured debenture is secured by the charge on some asset or set of assets. Basically, backed by the issuing company’s assets to fulfil the obligation. When it is issued solely on the credibility of the issuer, it is known as an unsecured debenture.
What is a specific debenture?
A fixed debenture, also known as a fixed charge debenture, is a debt that’s issued against specific assets. A fixed debenture typically carries a fixed rate of interest for the loan. … Companies sign over specific assets, such as real estate or equipment, to the creditor as collateral for the loan.
Who can issue a debenture?
Corporations and governments can issue debentures. Governments typically issue long-term bonds—those with maturities of longer than 10 years. Considered low-risk investments, these government bonds have the backing of the government issuer. Corporations also use debentures as long-term loans.
Can a listed company issue unlisted debentures?
16 March 2010 can a listed company issue unlisted non convertible debentures to a bank on private placement basis……….? … You will have to file the Information memorandum and the Listing Application Form duly filled for listing of debentures. In case you require any other details, please state.
How do I sell NCD before maturity?
NCDs cannot be withdrawn before maturity. Since NCDs are listed on the stock market they can be sold in the secondary market. Bank FDs attract TDS if gains are beyond Rs.
What is the meaning of non convertible debentures?
Definition: Debentures are long-term financial instruments which acknowledge a debt obligation towards the issuer. … The debentures which can’t be converted into shares or equities are called non-convertible debentures (or NCDs).
Can OPC raise funds?
Easy Funding It is a company is a private company, OPC can raise funds through venture capital, financial institutions, angel investors, etc. An OPC can raise funds thus graduating itself to a private limited company.
What is not a deposit?
A money for money transaction appears when it is apparent that what come in, is money, and what goes out is also in the form of money. Having said so, an advance extended for a specific purpose cannot be treated as deposit, however, an advance without such a specific purpose shall be nothing but a deposit.