Issuance of CCD
Overview – Issuance of Compulsorily Convertible Debentures (CCD)
Compulsorily Convertible Debentures (CCD) are a type of debt instrument issued by companies that must be converted into equity shares after a specified period or on the occurrence of certain events. CCDs combine features of both debt and equity — offering investors fixed interest payments initially, followed by equity participation post-conversion.
Issuing CCDs is a popular funding method for startups and growing companies, especially those seeking investments that do not immediately dilute equity but promise equity ownership in the future. CCDs provide flexibility in structuring the terms of investment and are governed by the Companies Act, 2013 and applicable SEBI regulations.
At Cardiff Services, we assist companies in managing the complete process of CCD issuance — from drafting terms, securing board and shareholder approvals, regulatory filings, to post-issuance compliance and conversion procedures.
Features – Issuance of Compulsorily Convertible Debentures (CCD)
Hybrid Instrument: Combines features of debt (fixed interest) and equity (conversion into shares).
Mandatory Conversion: CCDs must be converted into equity shares after a specified period or upon occurrence of certain events.
Fixed Interest Payments: Investors receive fixed periodic interest until conversion.
Deferred Equity Dilution: Equity dilution happens only after conversion, helping companies manage ownership structure initially.
Conversion Ratio & Timeline: Conversion terms, including ratio and timeline, are pre-determined and clearly defined.
No Voting Rights Before Conversion: Typically, CCD holders do not have voting rights until conversion.
Regulatory Compliance: Governed by Companies Act, 2013, SEBI regulations (for listed companies), and RBI/FEMA guidelines (if applicable).
Flexible Structuring: Terms related to interest rate, conversion, and redemption can be negotiated.
Suitable for Startups: Popular funding option for startups and early-stage companies looking for hybrid financing.
Improves Capital Structure: Helps balance debt and equity in the company’s financials.
Tax Benefits: Interest paid on CCDs is tax-deductible for the company.
Priority in Payment: CCD holders have priority over equity shareholders in repayment before conversion.
Documents Required – Issuance of CCD
Board Resolution approving the issuance of CCDs
Shareholders’ Resolution (if required by Articles or Companies Act)
Draft Debenture Subscription Agreement detailing terms of CCDs
Offer Letter or Private Placement Memorandum (if applicable)
Audited Financial Statements of the company
Valuation Report supporting the issue price of CCDs
Updated Memorandum of Association (MOA) and Articles of Association (AOA), if alteration required
Register of Members and Register of Debentures updated
Payment receipts evidencing subscription money received
Form PAS-3 (Return of Allotment) filed with RoC
KYC documents of investors (for private companies)
Foreign Investment approvals and documents (if applicable under FEMA)
Legal Opinion (optional but recommended)
Procedure – Issuance of CCD (Compulsorily Convertible Debentures)
Approve the issuance of CCDs
Decide key terms: amount, interest rate, conversion ratio, timeline, and other conditions
Shareholders’ Approval
Obtain shareholders’ approval through a General Meeting if required (e.g., for alteration of share capital or as per Articles)
Draft Offer Documents
Prepare Debenture Subscription Agreement, Offer Letter, or Private Placement Memorandum
Receipt of Subscription Money
Receive application and subscription money from investors within prescribed time
Board Meeting for Allotment
Approve allotment of CCDs and record minutes of the meeting
File Return of Allotment (Form PAS-3)
File Form PAS-3 with Registrar of Companies within 15 days of allotment
Issue Debenture Certificates
Issue physical or demat debenture certificates to CCD holders
Update Statutory Registers
Update Register of Members, Register of Debentures, and other statutory records
Compliance & Reporting
Ensure ongoing compliance including payment of interest and conversion procedures as per terms
Conversion to Equity Shares
On maturity or triggering event, convert CCDs into equity shares according to agreed ratio
File necessary forms with RoC and update registers post-conversion
With Cardiff Services, your CCD issuance is smooth, compliant, and professionally managed.
Frequently Asked Questions
A company name search ensures that your chosen business name is unique, legally compliant, and not already registered with Companies House UK. It helps you avoid legal disputes, trademark issues, and confusion in the Cardiff business market.
If your desired name is already registered, you’ll need to choose a different name or modify it. Using a taken name could result in rejection by Companies House or potential legal issues. Our experts can help you brainstorm alternative names that are compliant and market-ready.
It’s not advisable to use a name that’s too similar to another company, especially within the same industry. Similar names can confuse customers and risk trademark disputes. A company name search helps you identify these risks early.
For a company name search in Cardiff, you may need:
Proposed company name
Business entity type (Ltd, LLP, Partnership, etc.)
Jurisdiction (Cardiff / UK)
Owner or shareholder details (if applicable)
Business description
A “high probability” result means your proposed company name is likely to be available, but further checks are recommended. This is why our detailed Cardiff Company Name Search Report includes both identical and similar names for clarity.
Certain words are restricted under UK law (e.g., “bank,” “insurance,” “government”). If you want to use them, you’ll need special approval from regulatory bodies. We guide you through this process if your Cardiff business requires such terms