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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
What is Debenture Trust Deed?
OR
Write a note on Debenture Trust Deed.
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Answer

  • A debenture is a loan document that helps the company to raise long-term loans from the Market.
  • A person who purchases debenture of a company is called a debenture holder.
  • A debenture holder is a creditor of the company and cannot participate in the management of the company.
  • The company appoints debenture trustees to protect the interest of debenture holders.
  • The company enters into the contract with debenture trustees, which is called as ‘Debenture Trust Deed’.
  • The company can enter into a contract with one or more debenture trustees.
  • The Terms and Conditions of debenture trustees are written into the debenture trust deed.
  • It is a legal instrument conveying the assets of the company to the trustees.
  • Debenture Trust Deed is a right of debenture holder and duty of debenture trustees.
  • A company has to execute a trust deed within 3 months of the closure of the issue.
  • Member and debenture holder can inspect the copy of the deed and also get the copy by paying a certain fee.

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