P2 C2 ACCOUNTING FOR DEBENTURES — Elements of Account STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceElements of AccountP2 C2 ACCOUNTING FOR DEBENTURES3 Marks
Question
Explain the procedure for issue of debentures.
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Answer
The procedure for issue of debenture is as follows:
$(1)$ A resolution is passed at the meeting of Board of Directors of the company in which number of debenture, amount per debenture, total amount of debenture issued, rate of interest there on etc. are mentioned.
$(2)$ At the time of issue of debentures, Companies Act and provisions of $\text{SEBI}$ should be consider. A company should issue a prospectus or a statement in Lien of the prospectus with proper information imiting the public to subscribe for debentures.
$(3)$ Allotment of debentures should be equal the number of issued debentures against the number of debenture application received. For this, company has to open separate bank account in any scheduled bank.
$(4)$ As per rule of the Companies Act $2013,$ minimum subscription should be $90\%$ of the issued amount.
$(5)$ Full amount of debentures may be called by the company on application or may be called in installments.
$(6)$ After subscription or issue is close, allotment letter is sent to the applicants to whom debentures were allotted and debenture application money is refunded to those applicants to whom debentures were not allotted.
$(7)$ Debentures may be issued either at par at a premium or at a discount.
$(8)$ Debentures can be issued at discount. The rate of premium or discount is to be decided by the directors.
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