ISSUE OF DEBENTURES

Subject to the restrictions imposed by Section 71 of the Companies Act, 2013, a company can issue debentures. The procedure for issuing debentures by a company is very much similar to that of an issue of shares. Applications for debentures are invited from the public through the prospectus and the applicants are asked to pay the application money along with the applications. The company may ask for payment of the whole of the amount along with the application or by instalments.

Debentures may be issued either, (i) at par, or (ii) at a premium, or (iii) at a discount without any legal restriction.
Again debentures may be issued by a company in the following ways:

(1) for cash,

(2) for consideration other than cash, and

(3) as collateral security.