Issue of 0% Fully Compulsorily and Mandatorily Convertible Debentures by Private Limited Company

[PL Babu]

Dear Experts,

pls advise.

1 )     Whether a private limited company (not a subsidiary to public limited company)  can issue

                               0%  UNSECURED Fully Compulsorily and Mandatorily Convertible Debentures (CCDs) ?

If yes,

2)     Whether the Articles of Association of the Pvt company should contain all the provisions pertaining to terms and                     conditions of the issue of CCDS in the AOA of the Company ?

        Presently its AOA gives power to issue debentures. no detailed provisions. 

3)     Whether amendment of AOA is required to have terms of issue, nature of debentures etc.

Request for your valuable advise/comment/suggestion.

Thanks & regards,

P L Babu 

[Abdul]

Pvt Ltd company cannot issue unsecured Debenture if they issue it comes under the defnation  of deposite

they can issue only secured debenture 

[Manish Kedia]

Issue of unsecured Debenture (convertible or not) shall be regarded as "Deposit" as per Rule 2(b) of The Companies (Acceptance of Deposits) Rules, 1975. A private Company can't accept deposit pursuant to provisions of Section 3(1)(iii) of the Companies Act, 1956 and as per restriction in the AOA. However, any deposit taken from the Directors, Directors Relatives and member of a private Company may be permissible as the same is exempted from the definition of the term "Deposit".

Read more at: http://www.caclubindia.com/forum/issue-of-unsecured-convertible-debentures-by-private-co--124626.asp

Issue of unsecured Debenture (convertible or not) shall be regarded as "Deposit" as per Rule 2(b) of The Companies (Acceptance of Deposits) Rules, 1975. A private Company can't accept deposit pursuant to provisions of Section 3(1)(iii) of the Companies Act, 1956 and as per restriction in the AOA. However, any deposit taken from the Directors, Directors Relatives and member of a private Company may be permissible as the same is exempted from the definition of the term "Deposit".

Read more at: http://www.caclubindia.com/forum/issue-of-unsecured-convertible-debentures-by-private-co--124626.asp

Issue of unsecured Debenture (convertible or not) shall be regarded as "Deposit" as per Rule 2(b) of The Companies (Acceptance of Deposits) Rules, 1975. A private Company can't accept deposit pursuant to provisions of Section 3(1)(iii) of the Companies Act, 1956 and as per restriction in the AOA. However, any deposit taken from the Directors, Directors Relatives and member of a private Company may be permissible as the same is exempted from the definition of the term "Deposit". Regards

With Regards,

Manish Kedia

Company Secretary

GPT Sons (P) Limited

JC-25, Sector-III,

Salt Lake, Kolkata-700098

Ph.-91+9339671152, 033-4050 7324

Fax: 033-40507399

 

Issue of unsecured Debenture (convertible or not) shall be regarded as "Deposit" as per Rule 2(b) of The Companies (Acceptance of Deposits) Rules, 1975. A private Company can't accept deposit pursuant to provisions of Section 3(1)(iii) of the Companies Act, 1956 and as per restriction in the AOA. However, any deposit taken from the Directors, Directors Relatives and member of a private Company may be permissible as the same is exempted from the definition of the term "Deposit".

Read more at: http://www.caclubindia.com/forum/issue-of-unsecured-convertible-debentures-by-private-co--124626.asp

[PL Babu]

Thanks for reply sir,

Here, the allottee is a member & Holding company of issuer company.

On Thursday, November 28, 2013 10:35:12 AM UTC+5:30, PL Babu wrote:

[Abdul]

If allottee is member company can accept in the form of deposite co cannot issue debenture (unsecured)  certificate