Who appoints debenture trustee?

5. Who appoints a debenture trustee? A debenture trustee is appointed by the issuer company. They are SEBI registered and regulated entities.

Does the company have to appoint a debenture trustee?

Under the Provisions of Companies Act 2013, it is mandatory for a company intending to issue debentures/bonds with a maturity period of more than 18 months to appoint a full-time Debenture Trustee, regardless of whether debentures/bonds are fully secured or not.

Why is debenture trustee appointed?

Reason for the appointment of a Debenture Trustee

A Debenture Trustee is appointed by the issuer company and is given the task to protect the interests of the debenture holders and he will also serve as a mediate factor between the issuer company and the debenture holder.

Who are debenture trustees brief?

(1) Debentures Trustee is a person or institution which protects the interest of the debenture holders. The Trustees become the custodian of the assets on which charge has been created.

Who can remove a debenture trustee before the expiry of his term?

(e) any debenture trustee may be removed from office before the expiry of his term only if it is approved by the holders of not less than three fourth in value of the debentures outstanding, at their meeting. (iii) default in redemption of debentures.

Who is a debenture holder?

A debenture is a way that larger, public limited companies might borrow money at a fixed rate of interest. The company borrows money from the lender, who’s then called a “debenture holder”. … Unlike shareholders, debenture holders can’t vote at companies’ general meetings.

Who can issue a debenture?

Corporations and governments can issue debentures. Governments typically issue long-term bonds—those with maturities of longer than 10 years. Considered low-risk investments, these government bonds have the backing of the government issuer. Corporations also use debentures as long-term loans.

What is the purpose of a debenture?

Debentures. Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.

What is debenture Trust Deed answer in one sentence?

(1) The agreement created by the company, whereby trustees are appointed to protect the interest of debenture – holders before they are offered for public subscription is known as Debenture Trust Deed.

What period should the debenture certificate be issued?

Debenture certificate should be issued within a period of six months, from the date of allotment of debentures.

Can an NBFC be a debenture trustee?

b) Chartered Accountant(s) (not registered with SEBI) were appointed as the Debenture Trustee in respect of the debentures issued by an NBFC. BACKGROUND OF THE CASE: … Also, it was noticed that two chartered accountants, were appointed as a Debenture Trustee for the debentures issued by the NBFC.

What is a bank trustee?

The trustee is responsible for managing the trust’s assets according to the best interest of the beneficiaries and distributing assets to the beneficiaries according to the trust agreement. … A trustee has the legal authority to modify the trust account to add another beneficiary or a successor trustee.

What are the types of debentures available?