03 May 2012
I have following issues relating to issue of debenture by Pvt Ltd Company:- 1) Can a new pvt ltd company issue debentures? 2) As per sec 3(1)(iii) of Companies Act, 1956 a private company prohibit public issue of shares and debentures. In this case what is the meaning of "public"? 3) As per section 67(3) an offer will not be deemed to public offer if offer made to only 49 persons or less than 49. In this case can a company make distinct offering of securities with each such offering being made to less than 50 persons? 4)In above question no (3) what will be the meaning of "distinct offering of securities"?
03 May 2012
a) Under the Companies (Acceptance of Deposit) Rules, 1975 “any amount raised by issue of debentures (including convertible debentures) secured by the mortgage of any immovable property of the company and that the market value of the immovable property secured is higher than the amount of debentures issued” is not considered to be a DEPOSIT. b) Under Section 3(1)(d) of the Act, a Private Company is prohibited from accepting Deposit from persons other than its Directors, Members and their relatives. (c) Hence, the Private Company must issue Debentures only as a Secured Debenture.
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