{"id":2360,"date":"2021-02-16T07:13:46","date_gmt":"2021-02-16T07:13:46","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=2360"},"modified":"2021-02-16T07:15:37","modified_gmt":"2021-02-16T07:15:37","slug":"procedure-for-issue-of-debentures","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/","title":{"rendered":"Procedure for Issue of Debentures: A Complete Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">A debenture is a\nlegal document through which a creditor lends money to the debtor. Under the <strong><em>Companies\nAct 2013, Section 2(30) states<\/em><\/strong>, debenture includes debenture bonds,\nstock or any other instrument of the company which is an evidence of a debt,\nwhether it has or has not constituted a charge on the assets. Debentures are\nclassified as secured debentures and unsecured debentures. This article will\ngive a complete guide on procedure for <strong><a href=\"https:\/\/swaritadvisors.com\/issue-of-debentures\" class=\"text-primary\">issue of debentures<\/a><\/strong>.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3aa738c690a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3aa738c690a\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#What_are_Debentures\" title=\"What are\nDebentures?\">What are\nDebentures?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Types_of_Debentures\" title=\"Types of\nDebentures\">Types of\nDebentures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#What_are_the_Mandatory_Requirements_for_Issue_of_Debentures\" title=\"What are the Mandatory\nRequirements for Issue of Debentures?\">What are the Mandatory\nRequirements for Issue of Debentures?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#What_is_the_Procedure_for_Issue_of_Debentures\" title=\"What is the Procedure for Issue of Debentures?\">What is the Procedure for Issue of Debentures?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Intimate_to_the_Stock_Exchange_Regulation_29_of_the_SEBI_LODR_Regulations_2015\" title=\"Intimate to the\nStock Exchange (Regulation 29 of the SEBI (LODR) Regulations, 2015)\">Intimate to the\nStock Exchange (Regulation 29 of the SEBI (LODR) Regulations, 2015)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Hold_a_Meeting_of_Board_of_Directors_According_to_the_section_173_SS-_1\" title=\"Hold a Meeting\nof Board of Directors (According to the section 173 &amp; SS- 1)\">Hold a Meeting\nof Board of Directors (According to the section 173 &amp; SS- 1)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Filing_of_Form_MGT-_14_with_ROC\" title=\"Filing of Form MGT-\n14 with ROC. \">Filing of Form MGT-\n14 with ROC. <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Hold_an_Extra-_Ordinary_General_Meeting_Section_96_100_and_SS-_2\" title=\"Hold an Extra-\nOrdinary General Meeting (Section 96, 100 and SS- 2) \">Hold an Extra-\nOrdinary General Meeting (Section 96, 100 and SS- 2) <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Filing_Form_MGT-_14_with_ROC\" title=\"Filing Form MGT-\n14 with ROC \">Filing Form MGT-\n14 with ROC <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Opening_Separate_Bank_Account\" title=\"Opening Separate\nBank Account \">Opening Separate\nBank Account <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Preparing_and_filing_of_Private_Placement_Offer_Letter\" title=\"Preparing and\nfiling of Private Placement Offer Letter \">Preparing and\nfiling of Private Placement Offer Letter <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Receiving_amount_of_subscription\" title=\"Receiving amount\nof subscription \">Receiving amount\nof subscription <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Allotment_of_Securities_by_Private_Placement\" title=\"Allotment of\nSecurities by Private Placement\">Allotment of\nSecurities by Private Placement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Entries_in_Register_of_Debentures\" title=\"Entries in\nRegister of Debentures\">Entries in\nRegister of Debentures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Filing_Return_of_Allotment_with_ROC\" title=\"Filing Return of\nAllotment with ROC\">Filing Return of\nAllotment with ROC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Issuance_of_Relevant_Certificates\" title=\"Issuance of\nRelevant Certificates\">Issuance of\nRelevant Certificates<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/blog\/procedure-for-issue-of-debentures\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Debentures\"><\/span>What are\nDebentures?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to <strong><em>Section\n71 of the Act<\/em><\/strong>, a company can issue debentures with an option to convert\nthe debentures into shares, either partly or wholly at the time of redemption.\nProvided that the issue of debentures with the option to convert such\ndebentures into shares shall be accepted by a Special resolution passed by the\ndirectors or shareholders in an Extra- Ordinary General Meeting held by the\ncompany. <\/p>\n\n\n\n<p>A debenture is a legal document in the form of a certificate issued under the common seal of the company. It is used for the payment of a specific sum at a specified date.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/issue-and-redemption-of-debentures-problems-and-solutions\/\">Issue and Redemption of Debentures \u2013 Problems and Solutions<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Debentures\"><\/span>Types of\nDebentures<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Debentures are\nclassified as secured and unsecured debentures:<\/p>\n\n\n\n<ul><li>Secured Debenture- This type of debenture is\nbacked by a specific piece of property, that is for example, a factory, bunch\nof oil wells, pipelines etc. secured debentures may be issued by a company\nsubject to certain terms and conditions as may be prescribed under the <strong><em>Companies\nRules 2014<\/em><\/strong> and amendment thereof.<\/li><li>Unsecured Debenture- this type of debenture is\nbasically a loan without any kind of protection. It is only backed by the\ngeneral creditworthiness of the issuer of debentures.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Mandatory_Requirements_for_Issue_of_Debentures\"><\/span>What are the Mandatory\nRequirements for Issue of Debentures?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>A debenture cannot be issued by any company\ncarrying voting rights. <\/li><li>A company shall not make an offer, a prospectus\nor an invitation to the public or its members being more than five hundred for\nthe subscription of debentures, unless the company previously to such issue or\noffer, selected one or more debenture trustees and the conditions that govern\nthe appointment of such trustees. <\/li><li>Without the creation of trust, an issue of\ndebentures for over more than <strong><em>500 members<\/em><\/strong> <strong><em>or any number of public<\/em><\/strong>\nsubjected to clarification from government is forbidden. <\/li><li>A debenture trustee shall take necessary steps\nto protect the interest of the debenture holders and provide remedy to their\ngrievances. <\/li><li>Any provision of trust deed or any contract\nprotected by trust deed, excluding a trustee or indemnifying him against any\nliability for breach and infringement of trust shall be void. <\/li><li>If any default in compliance with the order of\nthe Tribunal is made, every officer of the company who is at default will be\npunished with imprisonment for term which may be extended to a <strong><em>period\nof 3 years<\/em><\/strong> <strong><em>or with a fine<\/em><\/strong> which will not be<strong><em> less than Rs. 2 lakh but may\nextend to Rs. 5 lakh or both. <\/em><\/strong><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Procedure_for_Issue_of_Debentures\"><\/span>What is the Procedure for Issue of Debentures?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/02\/Infographic-for-Swarit-SP-1.png\" alt=\"Procedure for Issue of Debentures\" class=\"wp-image-2362\" width=\"433\" height=\"438\"\/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Intimate_to_the_Stock_Exchange_Regulation_29_of_the_SEBI_LODR_Regulations_2015\"><\/span>Intimate to the\nStock Exchange (Regulation 29 of the SEBI (LODR) Regulations, 2015)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The listed\ncompanies shall make the prior intimation to the stock exchange at least <strong><em>2\nworking days<\/em><\/strong> in advance regarding the meeting of the Board of Directors\nin which the proposal for the issue of debentures through the private placement\nshall be considered, excluding the date of intimation and date of meeting.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hold_a_Meeting_of_Board_of_Directors_According_to_the_section_173_SS-_1\"><\/span>Hold a Meeting\nof Board of Directors (According to the section 173 &amp; SS- 1)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>A notice of Board meeting shall be issued <strong><em>at least 7 days<\/em><\/strong> before the date of the Board Meeting to all the Directors of the Company at their respective registered addresses with the company. A shorter notice can be issued in case of urgent meeting.<\/li><li>The Agenda or notes to Agenda are required to be attached with the notice and Draft resolution with the notice.<\/li><li>A meeting of Board of Directors of the company is to be held to pass necessary Board Resolution:<\/li><\/ul>\n\n\n\n<ol><li>To consider and approve issued of debentures through private placements.<\/li><li>To approve private placement offer letter.<\/li><li>To identify the group of persons to whom the Private Placement is to be made.<\/li><li>To fix date, day and time and venue to hold the Extra \u2013 Ordinary General Meeting of the Company.<\/li><li>To approve the draft notice of the Extra- Ordinary General Meeting along with the explanatory statement annexed to the notice as the requirement under the Section <strong><em>102 of the Companies Act, 2013.<\/em><\/strong><\/li><li>To Authorize the Director of the Company or the Company Secretary to sign and issue notice of the Extra- Ordinary General Meeting and to perform such acts, deeds and things as required giving effect to the Board\u2019s decision.<\/li><\/ol>\n\n\n\n<ul><li>The listed company shall submit the outcome of the Board meeting within <strong><em>30 minutes<\/em><\/strong> from the conclusion of the Board Meeting and publish the same on the website of the company with <strong><em>2 working days<\/em><\/strong>. (Regulation 30 &amp; 46(3) of the SEBI (LODR) Regulations, 2015). <\/li><li>A Draft Minutes is required to be prepared and circulated within <strong><em>15 days<\/em><\/strong> from the date of the Conclusion of the Board Meeting either by registered post, speed post, email or in person to all the directors for their comments. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_of_Form_MGT-_14_with_ROC\"><\/span>Filing of Form MGT-\n14 with ROC. <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The company is\nrequired to file a copy of the Board Resolution to ROC in Form <strong><em>MGT0-\n14<\/em><\/strong> within <strong><em>30 days<\/em><\/strong> of the passing of the resolution in the Board Meeting. <\/p>\n\n\n\n<ul><li>Obtaining Shareholders Approval<\/li><\/ul>\n\n\n\n<ol><li>By holding a Extra- Ordinary General Meeting, or<\/li><li>By passing a resolution through Postal Ballot. <\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hold_an_Extra-_Ordinary_General_Meeting_Section_96_100_and_SS-_2\"><\/span>Hold an Extra-\nOrdinary General Meeting (Section 96, 100 and SS- 2) <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>A notice of Extra- Ordinary General Meeting\nshall be provided at least <strong><em>21 days<\/em><\/strong> before the date of the\nmeeting in writing, either by registered post\/ speed post or in person or email\nor any other electronic means or shorter notice issued with the consent of at\nleast majority in number and 95% of such part of the paid up share capital of\nthe company giving right to vote at such a meeting in accordance with the <strong><em>Section\n101 of the Companies Act<\/em><\/strong>. <\/li><li>The notice shall be sent to all the members,\ndirectors, secretarial auditor, auditors of the company, debenture trustees and\nto others entitled to receive the notice of the Extra- Ordinary General\nMeeting. <\/li><li>The notice shall include the date, day, time and\ncomplete address of the place of the meeting and contain a statement of the\nbusiness to be transacted at the extra- ordinary general meeting. <\/li><li>The meeting is required to be held on a fixed\nday and a Special Resolution shall be passed for the issue of debentures\nthrough Private Placement. <\/li><li>The listed companies shall disclose the\nproceedings of the Extra- Ordinary General Meeting to the Stock Exchange within\n<strong><em>24\nhours<\/em><\/strong> from the date of the decision of the General Meeting and the same\nshall be posted on the official website of the company within <strong><em>2\nworking days<\/em><\/strong>. (Regulation 30 and 46(3) of the SEBI (LODR) Regulations,\n2015).<\/li><li>The details of the voting results shall be\nsubmitted to the stock exchange by the listed companies within <strong><em>48\nhours<\/em><\/strong> from the conclusion of the meeting and post the same on the\nofficial website of the company. (Regulation 44 of the SEBI (LODR) Regulations,\n2015). <\/li><li>The minutes of the Extra- Ordinary General\nMeeting is required to be prepared and shall be signed and compiled\naccordingly. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_Form_MGT-_14_with_ROC\"><\/span>Filing Form MGT-\n14 with ROC <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The company\nshall file the Form <strong><em>MGT- 14<\/em><\/strong> with the ROC within the <strong><em>30 days<\/em><\/strong> of the passing of\nthe Special Resolution in the Extra- Ordinary General Meeting along with the\nprescribed fee as specified under the Companies Rules, 2014 along with the\nfollowing attachments:<\/p>\n\n\n\n<ul><li>Certified true copy of the Special Resolution\npassed along with the explanatory statement.<\/li><li>Copy of Notice of meeting sent to the members\nalong with the annexure.<\/li><li>Shorter notice consent letter from the members\nin case the Extra- Ordinary General Meeting was held at a shorter notice.<\/li><li>Copy of attendance sheet of Extra- Ordinary\nGeneral Meeting.<\/li><li>Any other attachment as required.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Opening_Separate_Bank_Account\"><\/span>Opening Separate\nBank Account <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Company is\nrequired to open a separate bank account in the scheduled bank for keeping the\nmoney received on the application. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Preparing_and_filing_of_Private_Placement_Offer_Letter\"><\/span>Preparing and\nfiling of Private Placement Offer Letter <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>The company shall record the names of the\npersons to who the debenture through Private placement shall be offered. <\/li><li>The company shall make a Private Placement Offer\nLetter in Form <strong><em>PAS- 4<\/em><\/strong> and send these offer letters either in electronic form\nor in writing within <strong><em>30 days<\/em><\/strong> of the recording of the\nnames of such person along with the an application form serially numbered to\nthe person to whom it is made. <\/li><li>The company is required to maintain a complete\nrecord of persons to whom the Private Placement offer letter is sent in the\nForm <strong><em>PAS-\n5<\/em><\/strong>. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Receiving_amount_of_subscription\"><\/span>Receiving amount\nof subscription <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul><li>The company shall receive the amount of subscription\nthrough demand draft, cheque or other banking channels from the bank account of\nthe person subscribing to the debentures except on the case of issue of\ndebentures for consideration other than cash. <\/li><li>The company shall keep a record of the bank\naccount from where such payments for the subscription have been received. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Allotment_of_Securities_by_Private_Placement\"><\/span>Allotment of\nSecurities by Private Placement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>On closing the\nPrivate Placement Offer, the Company shall:<\/p>\n\n\n\n<ul><li>Hold a Board Meeting. Or<\/li><li>Pass a Board Resolution by circulation within <strong><em>60\ndays<\/em><\/strong> from the date of the receipt of the application money. <\/li><\/ul>\n\n\n\n<p><strong>When a Board meeting is held (as per <em>section 73 &amp; SS- 1<\/em>):<\/strong><\/p>\n\n\n\n<ul><li>Issue notice of board meeting to all the\ndirectors of the company at their respective addressed registered with the\ncompany at least <strong><em>7 days<\/em><\/strong> before the date of the board meeting. A shorter notice\nmay be issued in case of urgent business. <\/li><li>Attach the agenda and notes to agenda and draft\nresolution with the notice. <\/li><li>Hold a meeting of Board of Directors of the\ncompany and pass necessary Board Resolution.<\/li><\/ul>\n\n\n\n<ol><li>To consider the debenture allotment through Private Placement. <\/li><li>To authorize the company secretary or Director to file the allotment return with the ROC.<\/li><\/ol>\n\n\n\n<ul><li>Further, the draft minutes are required to be prepared and circulated within <strong><em>15 days<\/em><\/strong> from the conclusion of the Board Meeting either by registered\/ speed post, email or in person to all the directors for their comments. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Entries_in_Register_of_Debentures\"><\/span>Entries in\nRegister of Debentures<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Private\nCompany is required to make necessary entries in the Register of Debentures in <strong><em>Form-\nMGT- 2 within 7 days<\/em><\/strong> of the Board Meeting in which the debentures\nallotment was approved. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_Return_of_Allotment_with_ROC\"><\/span>Filing Return of\nAllotment with ROC<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Within the <strong><em>15\ndays<\/em><\/strong> from the date of the allotment, the company shall file return of\nallotment in Form <strong><em>PAS- 3<\/em><\/strong> with the Registrar of Companies (ROC) along with the\nattachments as below:<\/p>\n\n\n\n<ul><li>List of allottees, each allotment is required to\nbe added in a separate list.<\/li><li>Copy of shareholders or board resolution\napproving allotment of debentures is necessary in all the cases.<\/li><li>Complete record of private placement offers and\nacceptance in Form <strong><em>PAS- 5<\/em><\/strong> is necessary in case of private placement.<\/li><li>Any other information as required may be provided\nas an optional attachment.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issuance_of_Relevant_Certificates\"><\/span>Issuance of\nRelevant Certificates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Private\nCompanies which did not allotted debentures in demat format shall issue and\ndeliver the debentures certificates within 6 months period from the date of\nallotment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Debenture is a debt acknowledged by a company whether constituting a charge on the company\u2019s asset or not, whether convertible into shares or not. That is, the debentures are in the form of debt, unlike shares and do not carry any voting rights. The procedure for issue of debentures is discussed above in the article and must be issued in accordance with the rules and procedure prescribed under the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\">Companies Act, 2013<\/a>.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/conversion-of-debentures-into-shares\/\">Conversion of Debentures Into Shares: Its Complete Procedure<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A debenture is a legal document through which a creditor lends money to the debtor. Under the Companies Act 2013, Section 2(30) states, debenture includes debenture bonds, stock or any other instrument of the company which is an evidence of a debt, whether it has or has not constituted a charge on the assets. Debentures [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":2361,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[66,64],"tags":[392],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2360"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=2360"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2360\/revisions"}],"predecessor-version":[{"id":2367,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2360\/revisions\/2367"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/2361"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=2360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=2360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=2360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}