Issue of Debentures — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeIssue of Debentures4 Marks
Question
Who are Debenture Trustees? OR Explain the role of Debenture Trustees.OR Write a note on Debenture Trustees.
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Answer
Debenture holders are the creditors of the company and they cannot participate in the routine affairs of the management of the company. So, in order to protect the interest of debentures, the company appointed debenture trustees.
Debenture trustees are the institutions that protect the interest of debenture holders.
Debenture Trustees create a charge on assets of the company on behalf of debenture holders. They are the custodian of assets on which charge has been created.
In order to appoint debenture trustees, the company has to execute the debenture trust deed within 3 months, and the offer letter should be issued within 60 days after the allotment.
The prospectus or offer letter must mention the names of debenture trustees.
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