Meaning of Debenture Trust : Debenture is a debt for the company.
The company pledges its assets in favour of debenture holders against the debt raised. As per the Indian companies Act, a contract I agreement is exectued between the company and debenture holders and the said contract is registered with the Registrar of Companies. Thus, this contract agreement that lays down the conditions of debenture issue, is also known as Trust Deed! Trust Agreement.
When a situation araises about the fixed or floating charge, the action is taken in accordance with the trust deed.
Once a trust deed is registered with the Registrar, any amendment in the same can be made with the approval of the Debenture holders General Meeting.
2. Particulars included in Debenture Trust Deed:
(1) Primary information of the company
(2) Description of Debenture issue
(3) Information of Security Assets mortgaged
(4) Particulars of the appointment of Debentures Trustees
(5) Events of Defaults
(6) Obligations of Company
(7) Miscellaneous
(A) Amendmend made in any matter of Trust Deed
(B) Company is liable for payment of stamp duty on Trust Deed
(C) Provisions for meeting and resolutions of grievances, objections and resolution thereof.