The debenture Trustee is a liaison between the issuer company and the debenture holders, for the purpose of securing the interest of the debenture-holders by holding the secured property on behalf of the issuer company that is mortgaged in favor of the debenture trustee.
Who are debenture trustees answer in 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.
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.
What are the rights of debenture trustee?
Debenture Trustee Role and Responsibilities
To call for and keep a periodic check on the reports of the issuer company. To take possession of the trust property by provisions of the trust deed. To take appropriate measures to protect the interest of the debenture holders in case of any breach of the trust deed or law.
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 act as debenture trustee?
Who can be appointed a Debenture Trustee? To act as debenture trustee, the entity should either be a scheduled bank carrying on commercial activity, a public financial institution, an insurance company, or a body corporate. The entity should be registered with SEBI to act as a debenture trustee.
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 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.
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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 is the purpose of a Debenture Trust Deed?
A debenture trust deed is a debt instrument that is accompanied by a contract for repayment from the company issuing the debt. The company receives cash to fund its capital expenditures, and the investor receives guaranteed interest and principal payments.
What is disqualification of debenture trustee?
No one can be appointed as a debenture trustee if he has a share ownership in the company. He cannot be appointed if he is a promoter of the company, employee or the manager. No appointment for Creditor to the company. The vacancy of the debenture can be filled by the company by the consent of the other trustees.
Does the company have to appoint a debenture trustee case study?
Yes. The company should appoint a Debentures trustee. This is because, in the above case, Rose Limited Company proposes to issue debenture to the public to raise funds. Thus, the company issuing debenture must appoint one or more debentures trustees.
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.