Issuance of Debentures
Issue debentures — secured or unsecured, convertible or non-convertible — with board and shareholder resolutions, debenture trust deed, charge registration and PAS-3 filing with MCA.
Issue debentures for your company
Share the debenture type and amount. We draft the trust deed, create the charge and handle all MCA filings.
Talk to a CS →A complete issuance of debentures package
Board & Shareholder Resolution
Board resolution for debenture issuance — shareholder approval (special resolution) for secured debentures exceeding limits.
Debenture Trust Deed
Drafting of debenture trust deed appointing a debenture trustee — mandatory for publicly issued or listed debentures.
Charge Creation
Registration of charge on assets with the ROC within 30 days of creation — Form CHG-1.
PAS-3 Filing
Return of Allotment filed within 30 days of allotment of debentures.
Debenture Redemption Reserve
Creation of Debenture Redemption Reserve (DRR) and investment in specified securities — mandatory for listed companies.
Conversion Compliance (for NCD/OCD)
On conversion of convertible debentures, board resolution, equity allotment and PAS-3 filed.
What is needed for issuance of debentures
Board Resolution Mandatory
Every debenture issuance requires a board resolution — special resolution needed for secured debentures beyond the permitted limit.
Debenture Trustee for Public Issues
A registered debenture trustee must be appointed for debentures issued to more than 500 persons.
Charge Registration Within 30 Days
For secured debentures, the charge on assets must be registered with ROC via CHG-1 within 30 days of creation.
PAS-3 Within 30 Days
Return of Allotment must be filed within 30 days of debenture allotment.
DRR for Listed Companies
Listed companies must create a Debenture Redemption Reserve and invest in specified liquid assets before redemption.
FEMA for Foreign Debenture Holders
ECB reporting required for debentures issued to foreign investors — RBI Form ECB and periodic reporting.
Charge registration for secured debentures must be done within 30 days of creation. If Form CHG-1 is not filed within 30 days, the charge becomes void against the liquidator and any creditor of the company. Late registration requires condonation from the ROC.
Common issues with issuance of debentures
Simple steps, no surprises
Debenture structure confirmed
Type (secured/unsecured, convertible/non-convertible), tenure, interest rate and security confirmed.
Resolutions and trust deed
Board resolution passed, debenture trust deed executed, trustee appointed.
Allotment and charge registration
Debentures allotted, PAS-3 filed within 30 days, CHG-1 filed within 30 days for secured debentures.
Ongoing compliance
DRR created and invested annually (listed), interest paid on time, redemption executed on maturity.
Other services you may need
Frequently asked questions
A debenture is a debt instrument issued by a company to raise funds. It carries a fixed interest rate and a maturity date. Debentures can be secured (backed by a charge on assets) or unsecured, and convertible (converting to equity) or non-convertible.
A debenture trustee must be appointed when debentures are issued to more than 500 persons. The trustee represents the interests of debenture holders and monitors the creation and maintenance of security.
Form CHG-1 is filed with the ROC to register a charge created in favour of secured debenture holders. It must be filed within 30 days of the creation of the charge. A charge not registered within 30 days is void against the liquidator and other creditors.
Listed companies issuing non-convertible debentures must create a Debenture Redemption Reserve (DRR) equal to 10% of the outstanding debenture amount before redemption — and invest an equivalent amount in specified liquid securities by 30 April of each year.
Yes. Debentures issued to foreign investors (NRIs, FPIs or foreign companies) are treated as External Commercial Borrowings (ECB) under FEMA. RBI approval and ECB reporting through Form ECB is required — depending on the ECB framework track.
Ready to issue debentures for your company?
We handle the trust deed, charge registration, PAS-3 and ongoing DRR compliance — end to end.