For a private company issuing debentures secured by charge on immovable asets :
1. Is it necessary to appoint Debenture trustee
2. Can any person be appointed as Debenture trustee or is there any specified category of persons.
Kindly enlighten.
1 Replies
CMA. CS. Sanjay Gupta
("PROUD TO BE AN INDIAN")
(114225 Points)
Replied 05 September 2011
1. debenture trustee needs to be appointed.
2.
Who can be Trustees?
Only the following are eligible to be debenture trustee:
- A scheduled bank carrying on commercial activity.
- A public financial institution within the meaning of sections 4A (1) of the Companies Act 1956.
- Insurance Company.
- Body Corporate.
Who can not be a Trustee?
No person can be appointed as a trustee if he:
- Beneficially holds share in the company.
- Beneficially entitle to receive money, which are to be paid to/the by the company to the debenture trustee.
- Has entered into any guarantee in respect of principal debts, secured by debenture or interest thereon.
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