POCEDURE FOR ISSUE OF “DEBENTURES”
POCEDURE FOR ISSUE OF “DEBENTURES” Series- 138
As
I have already discussed the provisions relating to Debentures in my earlier article
series. In this article I will share the complete process of issue of debenture
under Companies Act 2013.
Work required to done before calling of Meeting:
ü Identify the person to
whom you will issue Debentures.
ü Prepare the list of such
persons to whom offer to subscribe debenture will give.
ü Prepare Draft offer
letter under PAS-4.
ü Identify the debenture
trustee (in case of offer for subscription is for more than 500 persons).
ü If there is requirement
to appoint Debenture Trustee, then obtain the consent of such debenture
trustee.
ü Ask the details from the
Bank to open separate Bank Account.
ü Identify the assets of
the Company on which charge will be creating (in case of issue of secured
debenture).
ü Obtain the Valuation
Report of the Property.
ü Obtain the valuation
report of Chartered accountant for valuation of equity shares. ( In case of issue of convertible debenture)
STEP-1
Call Meeting of Board Director:
ü Issue Notice of Board Meeting
to all the directors of Company at least 7 days before the date of Board Meeting.
ü Attach Agenda, Notes to Agenda and draft
resolution of Board Meeting along with Notice.
ü Approach the Debenture
trustee and [1]Obtain
the consent of the Debenture Trustee.
STEP-II
Hold
the Board Meeting:
ü Check the quorum of
Board Meeting.
ü Decide whether Company wants
to issue secured debenture or convertible debenture or any other mode of
debentures.
ü Get approve the list of
such persons to whom offer for subscription will be given.
ü Present Draft offer
letter under PAS-4.
ü Pass Board Resolution
for approval of offer letter.
ü [2]Pass Board Resolution to
increase borrowing limit of the Company subject to approval of the Shareholder
in General Meeting.
ü Passing of resolution for Issue the Notice of
General Meeting along with explanatory statement. (According to SS-2).
ü Passing of resolution
for Authorize a Company Secretary or director of Company to issue notice of
General Meeting.
ü Passing of Resolution
for take note of valuation report.
ü Notice shall specify
place, date, day and the hour of the Meeting and shall contain a statement on
the business to be transacted in theMeeting. [Section-101(2)]
ü Authorize a director of Companyto
issue notice of General Meeting.
ü Passing of resolution for
Open Separate Bank Account for allotment of debentures.
ü To pass resolution for
appointment of debenture trustee. If required.
[3]STEP-III
File Form with Registrar:
ü File MGT-14 with
Registrar within 30 days of passing of Resolution for
§ Issue of debentures
§ Borrow Money
Attachments:
ü Certified True copy of Board
Resolution.
STEP-IV
Hold
Extra Ordinary general Meeting:
ü Check the quorum of Meeting.
(Section-103).
ü Present Offer Letter in
PAS-4 before the members of the Meeting.
ü Pass Special Resolution
for Private Placement of Debentures.
ü Pass Special resolution
for increasing the borrowing limit of the Company to issue Debentures.
STEP-V
Circulate
Letter of Offer in form PAS-4:
ü Offer letter shall be
accompanied by an application form serially numbered and addressed specifically
to the person to whom the offer is made.
ü Offer Letter sent either
in writing or electronic mode.
ü Issue offer letter
within 30 days of General Meeting/recording the name of such person.
ü Offer letter should
mention the name of the Debenture Trustee, if appointed.
STEP-VI
File Form with Registrar:
ü File MGT-14 with
Registrar within 30 days of passing of Special Resolution.
Attachments:
ü Notice of General Meeting
along with Explanatory Statement.
ü Certified True copy of
Special Resolution.
ü Minutes of General Meeting
STEP- VII
Open
Separate Bank Account:
ü The payment to be made for subscription to
securities shall be made from the bank account of the person subscribing to
such securities.
ü The Company shall keep the record of the Bank
Account from where such payment for subscription has been received.
STEP- VIII
File
Form with Registrar:
ü File GNL-2 with Registrar within
30 days of circulation of offer letter.
ATTACHMENTS:
Ø PAS-4 (Offer Letter).
Ø PAS-5 (Complete record
of Private Placement).
STEP- IX
Call Board Meeting after receiving of allotment
of money.
ü Issue Notice of Board Meeting
to all the directors of Company at least 7 days before the date of Board Meeting.
[Section-173(3)]
ü Attach Agenda, Notes to
Agenda and draft resolution of Board Meeting along with Notice.
STEP- X
Hold the Board Meeting:
ü Check the quorum of
Board Meeting.
ü Present List of Allottes
before the Meeting.
ü Pass Board Resolution
for allotment of Debentures (within 60 days of receiving of money).
ü Pass Resolution for
issue of Debentures Certificate in same Meeting.
ü Authorize to two
directors and a authorize person to sign Debenturescertificate.
ü To pass a resolution to
create Debenture Redemption reserve.
ü [5]Pass a Board resolution
to create charge on the assets of the Company. (in case of secured debentures)
STEP- XI
File form with ROC:
File
CHG-9 with Registrar of Company.
ATTACHMENTS:
Ø Certified true copy of
resolution authorizing the issue of the debenture series is a mandatory in case
of creation of charge.
Ø Instrument containing
details of the charge created or modified is mandatory in all cases.
Ø Debenture Trust Deed, If
prepared.
Ø Certified True copy of
Special Resolution
STEP- XII
File form with ROC:
ü File PAS-3 with Registrar of Company.
ATTACHMENTS:
-
List
of Allottes.
-
Certified
True copy of Board Resolution for allotment of Debenture.
-
Valuation
Report
-
Certified
True copy of Special Resolution
STEP- XIII
Entry into register of Debenture:
ü
The
entries in the registers maintained under section 88 form MGT-2 shall be made
within 7(Seven) days after the Board of Directors approves the allotment of
debentures
STEP-XIV
Issue Share Certificate:
ü Issue Debenture
Certificate within 6 (Month) months from the date of allotment of Debentures.
Stamp Duty:
ü
Stamp
Duty adjudication as per provisions & rates of Stamp Act of the State (only
applicable on Marketable Debenture)
FLOW CHART:
S. NO
|
DAYS
|
PARTICULARS
|
DOCUMENTATION/
INFORMATION
|
FORMS
|
0
|
Check Points
|
ü
Identify the person to whom you will issue Debentures.
ü
Prepare the list of such persons to whom offer to
subscribe debenture will give.
ü
Prepare Draft offer letter under PAS-4.
ü
Identify the debenture trustee (in case of offer for subscription
is for more than 500 persons).
ü
If there is requirement to appoint Debenture Trustee, then
obtain the consent of such debenture trustee.
ü
Ask the details from the Bank to open separate Bank
Account.
ü
Identify the assets of the Company on which charge will be
creating (in case of issue of secured debenture).
ü
Obtain the Valuation Report of the Property.
ü
Obtain the valuation report of Chartered accountant for
valuation of equity shares. ( In case
of issue of convertible debenture)
|
N.A
|
|
1
|
Issue
the Notice of the Board meeting
|
·
Notice
·
Agenda
·
Notes
on Agenda
·
Draft
Resolution
|
N.A
|
|
9
|
Convening of the Board
Meeting
|
·
Attendance
Sheet
·
Present draft offer letter PAS-4.
·
Passing of Resolution for
-
Take note of valuation report
-
Decide whether Company wants to issue secured debenture or
convertible debenture or any other mode of debentures.
-
Approval
of Offer Letter.
-
Issue
of notice General Meeting.
-
Take
note Valuation Report.
-
Open
of Bank Account.
|
N.A
|
|
32
|
Convening
of the Extra Ordinary General Meeting
|
ü Pass Special
Resolution for Private Placement of Debentures.
ü
Pass Special resolution for increasing the borrowing limit
of the Company to issue Debentures.
|
N.A
|
|
33
|
Circulation of Letter of
offer
|
The
Letter of Offer together with all attachments should be dispatched to the
shareholders.
|
PAS-4
|
|
·
Offer will be open for minimum
period of 30 days.
·
Company will open the Separate Bank
account.
|
N.A
|
|||
62
|
Filing of e-forms
|
·
Filing
of forms within 30 days of passing of special resolution.
·
Special
Resolution to ROC
|
MGT- 14
|
|
63
|
Filing
of e-forms
|
·
Filing
of forms within 30 days of Issue of Letter of Offer.
·
Attachment:
ü
PAS-4
ü
PAS-5
|
GNL-2
|
|
80
|
Payment from subscribers
|
Receipt
of money from all the subscribers along with a letter for approval of offer.
|
N.A
|
|
82
|
Issue
the Notice of the Board meeting
|
·
Notice
·
Agenda
·
Notes
on Agenda
·
Draft
Resolution
|
N.A
|
|
90
|
Convening of the Board
Meeting
|
·
Attendance
Sheet
·
Passing of Resolution for
-
Allotment of Debentures
-
Issue of Debenture Certificates
-
Enter into debenture Deed (SH-12)
-
Creation of Debenture Redemption Reserve
-
Creation of Charge on assets of the Company.
|
N.A
|
|
97
|
Entry
into Register of Member
|
The
entries in the registers maintained under section 88 form MGT-2 shall be made
within 7(Seven) days after the Board of Directors approves the allotment of
debentures
|
MGT-2
|
|
120
|
Filing of e-forms
|
ü
Filing within 30 days of allotment of debentures.
ATTACHMENTS:
-
List of Allottees.
-
Certified True copy of Board Resolution for allotment of Debenture.
-
Valuation Report
-
Certified True copy of Special Resolution
|
PAS-3
|
|
120
|
Filing
of e-forms
|
ü File CHG-9 with Registrar of Company.
ATTACHMENTS:
-
Certified true copy of resolution authorizing the issue of
the debenture series is a mandatory in case of creation of charge.
-
Instrument containing details of the charge created or
modified is mandatory in all cases.
-
Debenture Trust Deed, If prepared.
|
CHG-9
|
|
90 days + 6 Month
|
Issue of Share Certificate
|
Issue Debenture Certificate within 6 (Month)
months from the date of allotment of Debentures.
|
N.A
|
|
Forms
Filling During the Process
|
MGT-14: File form with ROC within 30
days of passing of Board Resolution for issue of Debentures
Attachment:
v CTC
of Board Resolution for Issue of Letter of offer for right issue of
Debentures.
v CTC
of Board Resolution to Borrow Money.
MGT-14: File form with ROC within 30
days of passing of Special Resolution
Attachment:
v Notice
of General Meeting
v CTC
of Special Resolutions
v Minutes
of General Meeting
GNL-2 : File Form With
ROC within 30 days of Circulation of Letter of Offer:
Attachment:
v
PAS-4
v
PAS-5
CHG- 9 : File Form With
ROC within 30 days of creation of security:
Attachment:
v
CTC of Resolution for secure Debentures.
v
Debenture Trust Dee, if any
v
Instrument containing details of the charge
created or modified is mandatory in all cases.
PAS-3: File form with
ROC within 30 days of Passing of Board Resolution for Allotment of Shares.
Attachment:
v CTC
of Board Resolution for allotment of Shares.
v List
of Allottees.
|
[1]Required
to appoint in case company giving offer to subscribe debentures to more than
500 persons.
[2]
This resolution will be passed only in the condition when the current borrowing
along with old borrowing exceeding the 100% of paid up share capital and free
reserve.
[3]
No need to file this MGT-14 in case of Private Limited Company.
[4]
Company have time of 3 months form the date of closure of offer for execute
debenture trust deed.
[5]In
case of issue of the Secured Debenture.
Dear Sir,
ReplyDeleteI case of Issue of unsecured debenture do we need to hold EOGM or board meeting is sufficient?
Visit a Company and Preparation of Informative Report on the Procedure of Issue of Shares and Debentures
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