Section 71 of CA 2013 : Section 71: Debentures

CA 2013

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Explanation using Example

Imagine XYZ Ltd. wants to raise capital for expanding its operations. Instead of issuing only shares, the company decides to issue debentures with a feature that allows investors to convert these debentures into shares of the company after a certain period. According to Section 71(1) of the Companies Act, 2013, XYZ Ltd. must pass a special resolution in a general meeting to approve this issuance.

Furthermore, these debentures do not carry voting rights as per Section 71(2), meaning the debenture holders won't have a say in the company's management decisions.

XYZ Ltd. also cr...

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