Sources of Corporate Finance — Secretarial Practice STD 12 Commerce / Arts — Question

Mr. Rohit, an individual investor, invests his own funds in the securities. He depends on investment income and does not want to take any risk. He is interested in the definite rate of income and safety of the principal.

As the company is offering debenture to its members, can such debentures have normal voting rights?

What does he receive as a return on investment?

A trader has drawn a bill of exchange for ₹ 50,000 on the sales made to a trader. The bill is drawn on the 1st of March 2020 for a period of 4 months. It is already a month from the date of the drawing. Question (a) Is there any source of finance available to him? Question (b) Can he in present situation avail any facilities? Question (c) How will the charges be calculated?

Within what period should the company issue a Debenture certificate?

Name the type of security that Mr. Rohit will opt for.

DDS financial plans to raise ₹ 10 crores by issuing secured, Non-convertible debentures. However, as per the Articles of Association, the board of directors has authority only to raise up to 5 crores. They are also considering whether to go for a private placement or make a public offer. Please advise them on the following:

What does he receive as a return on his investment?

A public limited company wants to invite depositor from the public at large as it neither wants to dilute its shareholdings nor at present want to use its reserves.Question (a) Does it require prior approval from shareholders? Question (b) What type of resolution does the company need to pass? Question (c) Is it necessary to file the resolution with the Registrar?

Is the proposed issue within the borrowing powers of the board?