Secretarial practice

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Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVIII. Mortgages, debentures and receivers

Collection:: Economics Books

104 SECRETARIAL PRACTICE share capital, and no preference shares have been issued, the restriction does not apply until preference share capital exists [ Johnston Foreign Patents (1904), 2 Ch. 234]. We have already seen that, by s. 94 of the Act, a com- pany may not exercise its borrowing powers until it has received a certificate entitling it to commence business, but that a company may nevertheless, before it obtains the certificate, offer shares and debentures simultaneously for public subscription, may allot shares and debentures, and may receive money payable on application for debentures. Where a company has power to borrow and wishes to exercise it, the method usually employed is to issue a debenture or debentures. There is, of course, nothing to prevent a company securing a loan from an individual by a specific mortgage of some or all of its freehold or leasehold property, or from securing an overdraft by the guarantee of its directors or others, or from securing any loan by any method available to an individual. But the common practice is for a company to secure its loans by the issue of debentures. Nature of ‘In my opinion a debenture means a document which Debentures. cjither creates a debt or acknowledges it, and any document which fulfils either of these conditions is a debenture. I cannot find any precise legal definition of the term; it is not either in law or commerce a strictly technical term, or what is called a term of art’ [per Chitty, J., in Levy v. Abercorris Slate Co. (1888), 37 Ch. D. at p. 264]. A debenture is a document, not necessarily under the seal of the company [Lemon v. Austin Friars Investment Trust (1925), 41 T.L.R. 629], acknowledging or creating a liability to pay a sum of money with or without interest thereon at a specified rate. The money may be payable at a fixed date, or on notice, or the debt may be irredeemable or redeemable only on the happening of a contingency, however remote [s. 74]. The debenture may be payable to bearer, in which case it is a negotiable instrument passing by delivery, or it may be registered in the name of the proprietor, the registered holder. The payment of principal and interest need not be secured at all, in which case the debenture amounts to a mere promise to pay; but more commonly the payment is secured by a mortgage or charge on the property of the company. The charge may be created (a) by a trust deed, to the benefit of which the debenture holders are by the words of the debentures declared to be pari passu entitled; or .(b) by the language of the debenture itself. In either case the charge may be: (1) a fixed charge on the property of the company; (2) a floating charge on the property of the

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