New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    As per Companies Act, 2013, a company can issue secured

    debentures with a maximum tenure of _______ years and preference shares with a maximum tenure of ________ years.
    A 10 years, 10 years Correct Answer Incorrect Answer
    B 20 years, 20 years Correct Answer Incorrect Answer
    C 20 years, 10 years Correct Answer Incorrect Answer
    D 10 years, 20 years Correct Answer Incorrect Answer

    Solution

    Section 55 - Issue and redemption of Preference Shares: A company limited by shares: o Cannot issue irredeemable preference shares, o can issue preference shares redeemable within a period up to 20 years (if authorized by articles), o can issue preference shares for more than 20 years and up to 30 years for infrastructure projects (provided redemption of a minimum 10% of such preference shares per year from the 21st year onwards or earlier) Section 71 - Conditions for issue of Debentures: Tenure for secured Debentures: ·  Maximum 10 years ·  Exceptions : allowed up to 30 years for: Company setting up infra projects Infrastructure Finance Company (NBFC-IFC) Infrastructure Debt Fund (NBFC-IDF) Company permitted by Govt./RBI/NHB

    Practice Next