Question

As per Companies Act 2013, and related laws, who are the Debenture Trustee? ​

Answer 1

Answer:

Issuance of debentures is one of the ways of raising debt finance for a company. Debenture is a recognized instrument used by the companies, which evidences creation of a debt, whether such debt creates a charge on the assets of the company or not. Under the Companies Act, 2013, debentures being a security, it can be issued by a private company only through the route of private placement. A company can issue debentures with an option to convert such debentures into shares, either partially or fully, at the time of redemption of the share. However, before such option is given, it must be approved by the shareholders of the company by a special resolution in the general meeting of the company. Issuance of such debentures does not give the debenture holder any voting rights.