Unsecured Debentures - Stamp Duty

[harish bn]

Dear All,

 

An unlisted company has issued unsecured debentures to a Listed company. Whether stamp duty need to be paid for issue of unsecured debentures.

 

Kindly let me know with some legal provisions.

 

Best Regards

Harish

 

[harish bn]

Dear Friends,

 

Can any body share their experience w.r.t issue of unsecured debentures - stamp duty.

Regards

Harish

[paritala srinivasarao]

Dear Sir Issue of unsecured debentures amounts to Acceptence of deposits. If the unsecured debentures are having conversion clause, then it will be covered under exempted deposits.   Stamping of debenture certificate is mandatory. Amount of stamp differs from state to state.    Warm Regards P Srinivasa Rao Company Secretary 9840152398 --- On Fri, 2/7/10, harish bn <haris...@gmail.com> wrote:

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[harish bn]

Dear Sir,

 

As far the unsecured debentures stamping is concerned i believe it is as per Indian Stamp Act 9 (Art 27). And the Act does not specifically say about the stamping for unsecured deb. It only mentiones about stamping of Debentures of marketable security.

 

And unsecured debentures if issued as non marketable security then stamping is not applicable.

 

Any other views ?

 

Best Regards

Harish

 

 

 

 

 

[Madhan Kumar]

Unsecured debentures.—These debentures are also known as naked debentures. These debentures are not secured by way of charge on the company's assets. Interest rate payable on unsecured debentures is generally higher than that which is payable on secured debentures. In the case of unsecured debentures the company must ensure compliance with the provisions of the Companies (Acceptance of Deposits) Rules, 1975 since the unsecured debentures are treated as 'deposits' for the purposes of Companies (Acceptance of Deposits) Rules, 1975.
Rule 2(b)(x) of the Companies (Acceptance of Deposit) Rules, 1975 provides that amount raised by the issue of bonds or debentures secured by the mortgage of any immovable property of the company or with an option to convert them into shares of the company, does not constitute a deposit under section 58A. The Department of Company Affairs has clarified vide Circular No. 4/12/8-11CL-X, dated 10-3-1980 that in case of unsecured debentures with an option to convert a part of them into shares only the convertible portion of the debenture is exempt in terms of the provisions of rule 2(b)(x).

 

 

 

Best Regards

Madhan.BL.,CS.,

 

 

 

 

 

 

[harish bn]

Dear Members,

 

Do any body else have any other views regarding the stamping of unsecured debentures.

 

Best Regards

Harish