Q.Correct the underlined word and rewrite the following sentence:
To rate its debentures a company appoints
underwriters
.

The term is Debenture Certificate — the document issued by a company as evidence that the named person holds the stated number of debentures.

When a company allots debentures, it must give each debentureholder proof of his holding. This proof is the debenture certificate, which states the holder's name, the number and nominal value of debentures, the distinctive numbers, the rate of interest and the terms of repayment, under the company's common seal/authorised signatures.

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The underlined phrase is wrong. The correct phrase is Register of Debentureholders — debentureholders' details are entered here, not in the Register of Members.

Under the Companies Act, 2013 a company maintains statutory registers for different classes of security holders. The Register of Members contains particulars of shareholders (equity and preference). A separate Register of Debentureholders is maintained for those who hold the company's debentures.

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A company must issue debenture certificates within 6 months from the date of allotment of the debentures.

Just as with share certificates, the law prescribes a time limit for delivering debenture certificates so that holders get proof of their debt investment promptly:

• The company must complete allotment and then issue the debenture certificates within six months from the date of allotment. …

The underlined word underwriters is wrong; the correct term is credit rating agencies. Corrected sentence: To rate its debentures a company appoints credit rating agencies.

Before issuing debentures to the public, a company must get them rated so that investors know how safe the investment is.

• This rating is carried out by credit rating agencies such as CRISIL, CARE, ICRA or India Ratings, which assess the company’s ability to pay interest and repay principal. …