SECURED DEBENTURES – IS THE NEW COMPANY LAW A ROADBLOCK?

Debentures issued by a company may be secured or unsecured. Unsecured debentures may be considered “deposits” for which stringent rules apply. On the other hand secured debentures are not considered as deposits if the value of the security for such debentures is equivalent to the principal and interest on the debentures. Therefore, issue of secured debentures is an important means for a company to raise finance.