What Is Issuing Debentures and Bonds?

Issuing of Debentures shown with professionals exchanging documents, symbolizing legal fundraising.
Issuing of Debentures and Bonds – Legal & Secure Fundraising

When a firm requires money, one of the ways it can obtain it is by borrowing from investors or individuals. Rather than disposing of parts of the firm (stock), firms can use debentures or issue bonds. These are similar to agreements that the firm will repay the money with interest in the future.

Debentures are forms of loans that are borrowed by companies from investors. These are typically not secured by any asset or property but by the guarantee of the company to repay. Investors prefer debentures as they provide certain returns.

Bonds are also like debentures but typically secured by some guarantee or asset. Bonds are more secure and normally issued by large companies or the government. Bonds can be purchased and sold in the market.

Various kinds of companies, such as Private Limited Companies, Public Limited Companies, or LLPs, are allowed to issue debentures or bonds, but there are special norms they have to observe.

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    Why Use Legal Dalal for Issuing Debentures and Bonds?


    • We Prepare All Documents: Official letters, agreements, and government forms are all prepared by us clearly and accurately.
    • Comply With All Rules: We ensure that you comply with all the rules laid down by government organizations such as SEBI (Securities and Exchange Board of India) and RBI (Reserve Bank of India).
    • Help You Raise Money Securely: Regardless of whether your debentures are secured (supported by assets) or unsecured, we walk you through the process step by step to safeguard your company and investors.
    • Build Investor Trust: Legitimate, good, and clear documents enable investors to trust your company and assist you in raising funds.
    • We Assist Throughout India: Whether your company is located in Mumbai, Delhi, Bengaluru, Chennai, or elsewhere in India, our experts help you.


    What Services Do We Provide?

    Private Placement of Debentures

    Offer debentures to selective investors without going public, subject to all laws and rules.

    Public Bond Issues

    We guide the issue of bonds to the public and assist in paperwork, approvals, and listing in the market.

    Preparation of Debenture Trust Deed

    We draft significant legal documents that detail the rights and obligations of all stakeholders.

    Government Filing

    We file all relevant documents with the Ministry of Corporate Affairs, such as resolutions and returns, on your behalf.

    Stamp Duty and Charge Registration

    We help pay stamp duty (a tax) and register charges on assets at government offices.

    Arrange with Credit Rating Agencies

    In case of public issues, we arrange with agencies that rate your company’s credit-worthiness.

    Advantages Issue Debentures or Bonds

    • Maintain Full Control: You do not need to sacrifice any ownership or voting rights in your firm.
    • Fixed Payments: Investors get fixed interest, thus making the loans definite and appealing to them.
    • Raise Money for Long Term: Excellent means to raise money for large projects or expansions without sacrificing shares.
    • Gain Investor Confidence: Clear and lawful documents create confidence among investors and make future fund-raising easy.
    • Save Taxes: Interest on debentures may save your company’s taxable income..

    How We Assist You Step-by-Step

    • Plan with You: Know your requirement of money and plan how to raise it in the best manner by using debentures or bonds.
    • Prepare Documents: Prepare all the legal and official documents required for the procedure.
    • File with Government: File required documents with the Ministry of Corporate Affairs (MCA).
    • Allocate Debentures: Assist in distributing the debentures among the investors in the correct manner.
    • Register Charges: In case of secured loans, we register charges on properties with the government.
    • Issue Certificates: Issue physical or electronic certificates to investors reflecting their investment.

    What Documents Are Needed?

    • Company’s PAN card and Certificate of Incorporation
    • Board and Shareholder approvals (resolutions)
    • Offer letter and Subscription Agreement
    • Debenture Trust Deed (in case of secured debentures)
    • Auditor’s certificate regarding allotment
    • Credit Rating report (in case of public issues)
    • Details of Debenture Trustee
    • Government filing forms like PAS-3, MGT-14, CHG-9

    Why Should You Select Legal Dalal For Issue Debentures or Bonds?

    Issue Debentures or Bonds with Legal Dalal is simple. Here’s the step-via-step process:
    Experienced Team: We have 12–15 law and finance experts to assist you at each step.

    Stay Compliant: We ensure you comply with all legal regulations to prevent fines or issues.

    Quick Service: We work quickly to assist you in completing on time.
    Clear Pricing: We inform you of the prices beforehand with no additional charges.

    FAQs

    Yes, they can issue debentures to specific investors under private placement regulations.
    Bonds are typically more secure, asset-backed, and can be traded on stock exchanges. Debentures are generally unsecured and riskier.
    Credit ratings are required for public issues. For private placements, it is subject to the amount raised.
    Typically, this would be approximately 15 to 30 working days, depending on documentation and authorization.
    Yes, for secured debentures, assets' charges have to be registered with the Registrar of Companies.

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