A debenture trustee shall be appointed before the issue of prospectus or letter of offer for subscription of debentures and within a period of 60 days from the date of allotment a debenture trust deed is made to protect the rights and interest of debenture holders. Pass a board resolution to create a charge on the assets of the company. To pass a resolution to create debenture redemption reserve.
Enter into debenture trust deed sh 12 if required. Authorize to two directors and an authorized person to sign debenture certificate. Pass resolution for issue of debentures certificate in the same meeting.
Issue of debenture certificate it should be noted that any other debenture other that secured debenture secured by a first charge or ranked pari passu to first charge or a bond or debenture which is compulsorily convertible into shares of the company within 10 years from the date of issue are considered as deposits for the purpose of. A company cannot issue debentures with voting rights. Conditions to be kept in mind while issuing debentures.
Debenture certificates are issued to the allottees within the maximum time frame of 6 months from the date of allotment of the said debentures. On the other hand debenture stocks are loan contracts between a company and the holders. Companies and government bodies issue debt instruments or securities to accumulate funds at times via debentures.
However they are not similar. Often debenture and debenture stocks are treated similarly. A debenture is a type of debt issued by governments and corporations that lacks collateral and is therefore dependent on the creditworthiness and reputation of the issuer.
A debenture is issued beneath the true seal of the corporate acknowledging the receipt of cash suggestion. Debentures are offered to the general public for subscription within the same manner as for the issue of equity shares. Such a loan certificate is termed a debenture.
It means the issue price of a debenture is below its face value.
Issue of debenture certificate. In corporate finance a debenture is a medium to long term debt instrument used by large companies to borrow money at a fixed rate of interest. The legal term debenture originally referred to a document that either creates a debt or acknowledges it but in some countries the term is now used interchangeably with bond loan stock or note a debenture is thus like a certificate of loan or a. Issue of debenture at discount. The debenture is said to be issued at a discount when the issue price is below its nominal value.
Let us take an example a rs. 100 debenture is issued at rs. 90 then rs 10 is the discount amount. In such a scenario the liabilities and the assets sides of the balance sheet do not match.
Issue of debentures at par. When the issue price and face value of a debenture are equal it is known as the issue of debenture at par. In this case the long term borrowings in the liabilities section equals the cash in the balance sheet s assets side. Issue of debenture at discount.
Issue of debenture at discount. In this case the long term borrowings in the liabilities section equals the cash in the balance sheet s assets side. When the issue price and face value of a debenture are equal it is known as the issue of debenture at par.
Issue of debentures at par. In such a scenario the liabilities and the assets sides of the balance sheet do not match. 90 then rs 10 is the discount amount.
100 debenture is issued at rs. Let us take an example a rs. The debenture is said to be issued at a discount when the issue price is below its nominal value.
Issue of debenture at discount. The legal term debenture originally referred to a document that either creates a debt or acknowledges it but in some countries the term is now used interchangeably with bond loan stock or note a debenture is thus like a certificate of loan or a. In corporate finance a debenture is a medium to long term debt instrument used by large companies to borrow money at a fixed rate of interest.
