Welcome The debenture is defined in companies Act

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� The debenture is defined in companies Act as; ‘’ debenture includes debenture stock, bonds and any other securities of a company whether constituting a charge on assets of the company or not. ’’ [sec. 2(30)]. • [chitty. j. ] ‘’debenture means a document which either creates a debt or acknowledges it and any document which fulfils either of those conditions is a debenture’’.

�Debenture certificate. �Under common seal. �Debenture in a series. �Repayment. �Payment of Interest. �Creation of charge. �Movable property. �No voting rights.

1. Based on negotiability. • Registered • Bearer 2. Based on security. • Secured • Unsecured 3. Redeemability • Redeemable. • Irredeemable

4. Based on convertibility. 5. Based on priority. convertible 1 st debenture. Non convertible. 2 nd debenture.

A shareholder is a member of company. � A share holder has a voting rights. � Dividend on shares is to be paid only when the company has earned profits. � Share holders can not be issued at a discount. � Share holders can not be paid back their amount. � Share-holder A debenture-holder is only a creditor of the company. � A debenture-holder has no such rights. � Interest on debenture is payable whethere are profits or not. � Debentures can be issued at discount. � Debentures are normally redeemable. � Debentureholder

Debenture certificates.

� Debenture trust deed is a written instrument legally conveying property of a trustee for the purpose of securing a loan mortgage. � A trust deed shall be executed in the � it contains the following: Description of debenture issue. Details of charge created. Particulars of the appointment of debenture trustee. Events of defaults. Obligations of company. Miscellanrous. 1. 2. 3. 4. 5. 6. No. SH-12. form

Debenture trustee is a person or group of persons appointed for the supervision of the common interest of debenture-holder.

v Ensures sufficiency of assets of the company. v Ensures correctness of letter of offer. v To protect of interest of debenture-holder. v To prevent any breach of the terms of issue. v Appoints a nominee director oh the board of the company. v Provides information. v Convening of meetings. v Call for reports.

1. Sale 2. Debenture – holders action. 3. Appointment of receiver. 4. Foreclosure. 5. Proof of balance.

Sec. 72. of companies Act 2013, provides that a holder of securities may at any time nominate a person. �Documents for the purpose of identification. a. True copy of death certificate of security holder. b. Proof of D. O. B of nominee. c. An affidauit. d. The original sec

q q A fixed charge is already existing at the time when the floating charge can became fixed will have priority over it. A company cannot create a fixed charge in priority to the charge after it has crystallised. q q A company cannot however , created a further floating charge on the same assets to rank in priority. A debenture creating charge, whether floating or fixed , over any immovable property, is required to be registered u/s 77 of the Companies Act & sec. 17 of the registration Act.

Fixed charge is a charge created on specified assets of permanent nature. . � The company cannot sell property charged without the consent of the charge holder � A specific charge prevails over a floating charge even if created later. � Fixed It is usually created on current assets. The company can deal with the property subject to a floating charge in any manner it likes. � Subject to any contrary agreement with the charge holder holding the floating charge. � Floating

�A charge for securing any issue of debentures. � A charge on uncalled share capital of the company. � A charge on any immovable property wherever situated or any interest there in. � A charge on any book debt of the company. � A charge on a ship or any share in a ship. � A charge on a calls made but not paid.

• Particulars to be fixed with the registrar. • who should effect registration? • Time of registration. • Extension of time by central govt. • Certificate of registration. • provisions relating to registration of charges modification of charges. • Date of notice of charge. �Time to apply to limits for registration of charge. �With in 30 days of creation of charge. �After 3 o days and with in 3 oo days. � after 300 days.

� Register to be kept by the registrar (sec. 81). � Company’s register of charges (sec. 85). � Index to register of charges. � Right to inspect copies of instrument creating charges and company’s register to charges. [sec. 82(2)].

� The company shall give notice to the registrar for payment in full of any charge registered with him with in 30 days of such payment. � On receipt of such information the registrar shall send a notice to the holder of the charge to show cause with in 14 days. � The registrar may also record memorandum of satisfaction even if no intimation has been received by him from the company. provided he has received satisfactory evidence of satisfaction

� Central govt. may on application made by the company in form CHg -8, extend the time limit. � Omission to file the registrar the particulars of any charge subject to which any property has been acquired by a company. � On any other grounds its just and equitable to grant relief.

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