A company can issue only certain types of debentures.

Answer: The statement is justified.

The Companies Act, 2013 and the rules made under it regulate the issue of debentures to protect investors:

• A company cannot issue debentures carrying voting rights (Section 71(2)).
• Debentures may be secured or unsecured, redeemable, and fully or partly convertible; convertible debentures can be issued only with the approval of shareholders by a special resolution.
• Secured debentures must be secured by a charge on tangible assets of sufficient value, and must be redeemed within the prescribed period (generally 10 years, and up to 30 years for certain infrastructure companies).
• Debentures are issued in registered form: the names of holders are entered in the register of debentureholders (Section 88), so bearer debentures are not issued in India. Secured debentures cannot be perpetual, as they must be redeemed within the prescribed period.
• Where debentures are issued to the public or to more than 500 persons, debenture trustees must be appointed and a Debenture Redemption Reserve may be required.

Thus a company can issue only those types of debentures permitted by law, i.e. secured or unsecured, convertible or non-convertible, redeemable and registered debentures without voting rights.