The definition and the definition of debenture In legal terms, there is no specific definition for the debentures. In the case of Levy v. Slate & Slab Co. Abercorris. (1887) 37 Ch. 260, 264, Chitty J said " A debenture means a document Selatan Either Creates a debt or acknowledges it, and Any document Selatan fulfils Either of These is adebenture conditions. Precision metal I can not find any legal definition of the term. It is not in law or commerce Either a Strictly technical terms, or what is Called a term of art. " Whilst the the Section 4 (1) also provides definitions debentures as "stacks debentures, bonds, notes and other securities of the corporation whether a charge on the assets of the corporation or not" Of the two definitions above, it can be concluded that the debenture is a confession document or documents that saw the company's debt to creditors, where this debt will often be accompanied by a charge on the assets of the company, either in one / more than one charge. Should be noted that not all the documents that saw the company's debt is a debenture. Normally debenture referred to a method to recover the debt for a long distant term. Debenture holders will benefit from the debt / loans given to the company Section 74. Qualifications of trustee for debenture holders. (1) Subject to this section every corporation which offers debentures to the public for subscription or purchase in Malaysia after the commencement of this Act shall make provision in those debentures or in a trust deed relating to those debentures for the appointment of a trustee corporation as trustee for the holders of the debentures Based on the above, clearly shows any company that offers debentures to the public shall state the appointment of a trustee to the debenture holders of the debentures or the trust deed issued (2) Where a borrowing corporation is required to appoint a trustee for the holders of any debentures in accordance with subsection (1) it shall not allot any of those debentures until the appointment has been made and the trustee corporation has consented to act as trustee. This means that borrowing is not allowed to issue debentures until the corporation appointed as trustee agrees to act as trustee and the appointment has already been created. we need to understand that the trustee appointed by the Company shall consist of a corporation. This means that an individual is not eligible to be appointed as trustee to the debenture holdaers (3) Without leave of the Court, a trustee corporation shall not be appointed, hold office or act as trustee for the holders of debentures of a borrowing corporation if that trustee corporation is - (a) a shareholder who beneficially holds shares in the borrowing corporation; (b) beneficially entitled to moneys owed by the borrowing corporation to it; (c) a corporation that has entered into a guarantee in respect of the principal debt secured by those debentures or in respect of interest thereon; or (d) a corporation that is by virtue of section 6 deemed to be related to - (i) any corporation of a kind referred to in paragraphs (a) to (c) ; or (ii) the borrowing corporation. This means that if the borrowing company had appointed his own company or a company which is a guarantor for debts incurred or to appoint a company that has an interest on the debt incurred as a trustee to the debenture holders are protected, who was appointed trustee can not stop arbitrary, melaikan it replaced with another corporation with qualifications as provided by the Act. (4) Notwithstanding anything contained in subsection (3), that subsection shall not prevent a trustee corporation from being appointed, holding office or acting as trustee for the holders of debentures of a borrowing corporation by reason only that - (a) the borrowing corporation owes to the trustee corporation or to a corporation that is deemed by virtue of section 6 to be related to the trustee corporation any moneys so long as such moneys are - (i) moneys that (not taking into account any moneys referred to in subparagraphs (ii) and (iii)) do not, at the time of the appointment or at any time within a period of three months after the debentures are first offered to the public, exceed one-tenth of the amount of the debentures proposed to be offered to the public within that period and do not, at any time after the expiration of that period, exceed one-tenth of the amount owed by the borrowing corporation to the holders of the debentures; (ii) moneys that are secured by, and only by, a first mortgage over land of the borrowing corporation, or by any debentures issued by the borrowing corporation to the public or by any debentures not issued to the public which are issued pursuant to the same trust deed as that creating other debentures issued at any time by the borrowing corporation to the public or by any debentures to which the trustee corporation, or a corporation that is by virtue of section 6 deemed to be related to the trustee corporation, is not beneficially entitled; or (iii) moneys to which the trustee corporation, or a corporation that is by virtue of section 6 deemed to be related to the trustee corporation, is entitled as trustee for holders of any debentures of the borrowing corporation in accordance with the terms of the debentures or of the relevant trust deed; or (b) the trustee corporation, or a corporation that is deemed by virtue of section 6 to be related to the trustee corporation, is a shareholder of the borrowing corporation in respect of shares that it beneficially holds, so long as the shares in the borrowing corporation beneficially held by the trustee corporation and by all other corporations that are deemed by virtue of section 6 to be related to it, do not carry the right to exercise more than one-twentieth of the voting power at any general meeting of the borrowing corporation. (5) Nothing in subsection (3) shall - (a) affect the operation of any debentures or trust deed issued or executed before the commencement of this Act; or (b) apply to or in relation to the trustee for the holders of any such debentures, unless pursuant to any such debentures or trust deed a further offer of debentures is made to the public after the commencement of this Act. It asserts that voyages anywhere debentur or mail the bond Trustees are published or completed prior to the beginning of this Deed or force used to or in relation to the mandate holders to any holder of such debentur (6) If default is made in complying with this section, the corporation and every officer of the corporation who is in default shall be guilty of an offence against this Act. Penalty: Ten thousand ringgit. Default penalty. This means any employee of the perbadanan mengingkar or does not comply with the provisions in this section then the claim may be made for making a mistake on this Deed.This is in order to outline the line between justice both parties who deal with this debenture.With this, each party's interests are protected and also dimaksimakan.
Pages to are hidden for
"Company Law - Debentyre"Please download to view full document