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    Issuance of debentures to raise money

    Posted By : Gaurav / Published on : 27-Feb-2021 01:25 PM / View : 423 / Comment : 1

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    Dear CC Members,

    If any unlisted private company wants to issue debentures to raise money, then how much can be issued without the permission of the SEBI?

    Please guide.
    Read more on : money raise debentures issuance

    • As per the Companies Act, 2013, an unlisted private company can issue debentures up to the limit of 10 crore rupees in a financial year without the requirement of obtaining prior approval from the Securities and Exchange Board of India (SEBI).

      However, the company needs to comply with certain conditions and requirements prescribed under the Companies Act, 2013 and the rules made thereunder. These include obtaining the approval of the shareholders through a special resolution, maintaining a debenture redemption reserve, creating a charge on the assets of the company, appointing a debenture trustee, and filing the offer letter and other documents with the Registrar of Companies.

      It is important to note that the limit of 10 crore rupees is applicable for each financial year, and any debenture issuance beyond this limit would require the prior approval of SEBI. The company must also ensure compliance with all applicable laws, regulations, and guidelines while issuing debentures.

      Therefore, an unlisted private company can issue debentures up to 10 crore rupees in a financial year without seeking the approval of SEBI, subject to compliance with the applicable laws and regulations.

      13-04-2023 / 11:56:49 AM
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