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of <h1>Section 71 rules on debentures: no voting rights, mandatory reserves, trustees, and strong protections for debenture-holders</h1> Section 71 permits a company to issue debentures, including convertible debentures, subject to approval by special resolution, but debentures cannot carry voting rights. Secured debentures may be issued on prescribed terms, and the company must create and use a debenture redemption reserve solely for redemption. Where public or large member subscriptions are invited, appointment of debenture trustees is mandatory; trustees must protect debenture-holders, cannot be fully exempted from liability for lack of due care, and may seek Tribunal restrictions if assets are inadequate. The Tribunal can order immediate redemption and payment of interest on default. Debenture subscription contracts are specifically enforceable, and the Central Government may prescribe detailed procedures, forms, and reserve requirements.
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