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Thursday, 29 January 2015

Checklist for Issue of Non-Convertible Debentures: Unlisted Company(Companies Act, 2013)


Please note as per the provisions of the Companies Act, 2013; for issue of Non-Convertible Debentures (NCDs) whether it be private company or public company if the securities (which includes debentures), if it is proposed to be listed then the listing agreement and securities laws shall be complied with. The Below mentioned checklist only covers the provisions mentioned in the Companies Act, 2013.

CHECKLIST FOR ISSUE OF NCDs

Sr. No.
Activity
Date
Remark
1.
Board Meeting:
(i)Proposal for issue of Debentures
(iii)  Approval of draft offer letter and authorization to issue the offer letter subject to approval by shareholders
(iv) Registering the name of persons to whom offer to be made
(v) Authorization for opening of bank account for the purpose of the said issue
(vi) Calling of general meeting


The offer letter shall be sent to the person whose name is recorded for the purpose within 30 days of recording his name.


2.
General Meeting:
Shareholders’ approval for:
(i)                  Borrowing Limits
(ii)                Creation of Charge
(iii)               Issuance of Debentures

MGT -14 to be filed within 30 days of passing of special resolution

This resolution will be valid for a period of one year.
3.
Sending of offer Letter & Opening of Bank Account:
The offer letter shall be sent after approval by the shareholders and the bank account shall be opened for receiving the application & allotment money

Offer letter shall be sent within 30 days of registering the name of proposed applicant
4.
Filing of Offer letter with ROC:
Within 30 days of circulation of offer letter, it shall be filed with ROC

PAS-4 & PAS-5 as attachment to GNL - 2
5.
Receiving of Money:
The applicant shall made the application in the format given with the offer letter for allotment of securities and shall pay the money from his bank account.


6.
Board Meeting:
(i)After closure of offer the allotment shall be made to the applicant from whom the money has been received. The allotment shall be made within 60 days of receiving of the money.
(ii) Approval of drafts of agreement for creation of charge & Authorization to director for signing the same.

Here Agreement means the agreement if any to be entered with the debenture holder.

MGT-14 for board resolution for allotment of debentures
7.
Return of Allotment:
Within 30 days of allotment return of allotment shall be filed with ROC


PAS - 3 
8.
Details of offer and allotment shall be maintained by the company in PAS - 5


9.
Creation of charge:
After allotment of debentures, charge shall be created in favour of the debentureholder, and the return for creation of charge shall be filed with ROC within 30 days of creation of charge


CGH - 9
10.
Issue of Debenture Certificate:
Within 6 months of allotment of debentures




~By Nikita Singh~

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