Procedure for registration of charge for securing issue of debentures

1)      File with the concerned ROC within 30 days after the execution of the deed containing the charge or after the executing of any debentures of a series ( if there is no such deed) particulars of the charge created in{ Section 124(4) } .

2)      If there is more than one series of debentures in the series, then file with the ROC particulars of the date and amount of each issue along with the e-form no 10.

3)      If any commission, allowance or discount, has been paid or made either directly or indirectly by company to any person for subscribing or procuring or for agreeing to subscribe or procure any debentures in the issue of a series of debentures, then include in the particulars of the charge to be filed with the ROC also the particulars as to the amount or rate per cent of the commission, discount or allowance paid or made.

4)      File { E form no 10 } with the concerned ROC with the following documents as attachments :-

 

Ø  Copy of the instrument or deed creating or evidencing the charge verified in the prescribed manner or if there is no such deed then one of the debentures of the series.

Ø  Copy of resolution authorising the issue of debenture series.

Ø  Other optional attachments .( Resolution)

5)      Ensure that the e-form is digitally signed by the authorised signatory of the banker along with the authorised signatory of the company (Managing Director or director or secretary) and certified by PCS or PCA.

6)      Make the payment of requisite fees prescribed by the Companies { Schedule X of Companies Act }

7)      The particulars to be mentioned in the e-form No. 10 are :

o   Number of trustee of debenture holders.

o   Name and address of trustee or trustees of debenture holders.

o   Date of creation of charge

o   Whether the charge is for entire series of debentures or any issue in a series of debentures.

o   The total amount secured by the whole series.

o   Date of registration of series.

o   Date of present issue of series

o   Amount of present issue of series.

o   The dates of the resolutions authorising the issue of the series.

o   Description of the property charged.

o   Particulars of the property charged.

o   Particulars of the property charged including location of the property.

o   Brief of the principle terms and conditions including rate of interest, date of redemption and creation of debenture redemption reserve.

o   Extent and operation of the charge.

o   Particulars as to amount or rate per cent of the commission, allowances or discount (if any) paid, or made either directly or indirectly by the company to any person(s) in consideration of their subscribing or agreeing to subscribe, whether absolutely or conditionally, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any of the debentures included in this return.

NOTE

This section is applicable both to debentures and debenture-stock.

This section provides for filing with the Registrar the particulars specified in clauses (a) to (d) in case of series of debentures entitling holders pari passu. These particulars have to be filed within thirty days of the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series. These particulars should be filed with the deed (or verified copy thereof) containing the charge, or if there is no such deed, one of the debentures of the series. Where more than one issue is made of debentures in the series, particulars of the date and amount of each issue are required to be filed with the Registrar. However, an omission to do so does not invalidate the debentures issued.

Where debentures are issued creating a charge, it is usual to declare expressly that the charges created by all the debentures of the series are to rank equally and without priority of one over another. If it is not so declared, each debenture creates a charge ranking in priority to all others issued subsequently, but postponed to all issued before it.

If there is a series entitled in one event to rank pari passu, but not in another event, and the Registrar registers the charge under this section and certifies it as a series entitled pari passu, that will not make the series pari passu. But this certificate will be conclusive under section 132 that the requirements of the section as to registration have been complied with. The certificate is also conclusive although some required particulars have not been given to the Registrar or entered on the register.