Issueing of bonds with who's permission

C Senthil Kumar (Querist) 09 January 2012 This query is : Resolved

I am running a Proprietorship firm. Planning to raise capital by issuing Bonds to the known people and companies.

For this kind of Bond, am I required to get permission from any authority like RBI or SEBI.

My issue is anyway I am going to rasie the capital in this route only (Bond private placement). what I am planing is to give Bank Guarantee to the people who is lendng to me. Say 50% of principle amount.
I had meeting with the Regional Manager of the Bank for the Bank Guarantee part. He raised two issues
1. about the Bond (is any requirement to obtain perior permission from RBI). according to my Knowledge there is no such requirement. that is why I am asking for some clarification with some solid evidence. As of now I can change the Terms and Conditions.
2. Bank Guarantee Text. This one resolved

Please reslove my quary.

Regards

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C Senthil Kumar (Querist) 09 January 2012
Request resolve the Bond issue.

R.Ramachandran (Expert) 09 January 2012
Dear Mr. Senthil Kumar,
A proprietorship concern cannot issue any such Bonds.
Further more, all that you will be issusing would at best be a Promissory Note - nothing more nothing less. For issuing promissory note, you do not require anybody's permission. It is only the lenders who should have faith in such promissory notes issued by you.

Rajeev Kumar (Expert) 09 January 2012
You will issue promisory note

Deepak Nair (Expert) 09 January 2012
Hope you are satisfied with the views of Mr.Ramachandran.

@ Mr.Ramachandran:- Thanks, I could learn comethiing new.

ajay sethi (Expert) 09 January 2012
agree with Mr Ramchandran .

prabhakar singh (Expert) 09 January 2012
i too agree with Mr Ramchandran .He does not provide any room for disagreement.

M/s. Y-not legal services (Expert) 09 January 2012
ramachandran sir appearing mean, we juniors can learn new things deepak.,

-tom-

V R SHROFF (Expert) 09 January 2012
I fully Agree with Shri R Ramchandran.

Along with Promissory Note, you can issue PD cheque to bind yourself, so investor may create faith and invest with you.
If you have sufficient Asset, Shop, Land , Building, can create Lien for few large investments. After all they are all your friends.

BETTER WAY IS , MAKE THEM SLEEPING PARTNERS, REGISTERING PARTNERSHIP FIRM.

Devajyoti Barman (Expert) 09 January 2012
Yes nothing there to differ..

M V Gupta (Expert) 11 January 2012
Bonds and debentures are issued by corporate bodies or companies, not by individuals or proprietorship concerns. As advised by the experts above you can raise funds for ur business by executing promissory notes.