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Issue of Debentures — Secretarial Practice STD 12 Commerce / Arts — Question

Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeIssue of Debentures4 Marks
Question
Debenture trustees are appointed by a company issuing debentures.
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Answer

  • Debenture trustees are appointed when the company issues a prospectus or invites more than 500 people.
  • They are appointed to protect the interest and redress the grievances of debenture holders.
  • Debenture trustees act as custodians of assets and create a charge on assets of the company on behalf of debenture holders.
  • In case, the company failed to redemption of a debenture or its interest, then debenture trustees by the order of NCLT can realize the assets and settle the dues.
  • Thus, it is rightly said that debenture trustees are appointed by the company for issuing debenture.

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