What is the debenture certificate?
Debenture Certificate is a document that certifies that the holder is the creditor of the company for the amount mentioned in the certificate. It is issued to all debenture holders. It is issued within a period of six months from the date of allotment of debentures.
What type of debentures can be issued by an Indian company?
Secured debentures
Secured debentures shall adhere to the conditions prescribed. Section 71(3) says that subject to certain prescribed terms and conditions secured debentures can be issued by a company. (1) The company shall issue secured debentures , provided that the date of redemption does not exceed 10 years from the date of issue.
Can debentures of private company be listed?
CAN A PRIVATE COMPANY LIST ITS DEBENTURES? Yes, a Private Company can issue bonds/debenture under the Companies Act 2013. There are regulations with respect to maintain asset cover, credit score rating, debenture redemption reserve, hold liquid assets for current maturities, etc.
Why debentures are issued?
Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.
Is debenture A security?
A debenture is a marketable security (a type of investment) issued by a business or other organization to raise money for long-term activities and growth. It is a form of debt capital so it is accounted for as debt on the balance sheet of the issuing company.
Can a company buy its own debentures?
Yes, a company can purchase its own debentures provided it is authorised by its Article of Association. A company may also purchase its own debentures with the motive of investment and sell them at higher price in future and thereby earn profit.
What is listing of debentures?
As per Section 2(30) of Companies Act, 2013 “Debentures” include debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not. …
Are debentures safe?
What some investors don’t realise is that, unlike fixed-term deposits that carry virtually no risk, debentures come with a high level of risk. Unfortunately, there’s no such thing as a free lunch with fixed interest securities such as debentures. The market is quite efficient at pricing a risk premium into the return.
Is debenture an asset?
A debenture is a type of debt instrument that is not backed by any collateral and usually has a term greater than 10 years. Debentures are backed only by the creditworthiness and reputation of the issuer. Both corporations and governments frequently issue debentures to raise capital or funds.
Can I buy debentures?
Issue: Non-convertible debentures are offered by companies through an open issue. Investors can buy the same in the primary market when the issue is open. They can also choose to purchase NCDs being traded on the stock market at a later point in time.
When do debentures have to be issued in India?
As per Section 56 (4) of the Companies Act, 2013 debenture certificate must be issued within a period of 6 months from the date of allotment. As per Section 56 (6) If a Company failed to issue Debenture Certificate withing prescribed time limit then it shall be made liable to pay a fine minimum of 25,000 rupees which may extend to 5,00,000 rupees.
What do you need to know about a debenture certificate?
The debenture certificate is a document, which certifies that the holder is the creditor of the company to the limit of a number of debentures multiplied by the face value of each debenture.
How are debentures defined in the Corporate Law Act?
Debenture is defined in Sec 2 (12) of the Act as including debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not. This is an inclusive definition .and does not define what is debenture.
Can a debenture holder be the owner of a company?
As the debenture holders are not the owner of the company so they are not entitled to the administration and management of the company.