Debenture is a written instrument acknowledging a debt under the common seal of the company It contains terms and conditions of contract as regard the payment of interest and redemption of the principal ID: 256641
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Slide1
Issue of Debentures
Debenture is a written instrument acknowledging a debt under the common seal of the company. It contains terms and conditions of contract as regard the payment of interest and redemption of the principal. Slide2
Definitions
Acc to section 2 (12) of the companies Act 1956 , “Debenture includes debenture stock, bonds and any other securities of the company whether constituting a charge on the assets of the company or not.”Slide3
Features
1. It acknowledges the debt of the company.
2. Carries interest at fixed rate, it is fixed before the issue of debentures.
3.It is secured by a charge on the assets of the company.
4. Debenture holders do not enjoy any voting right.Slide4
5. No legal restrictions on purchase of
of
its own debentures by a company.
6. No legal restrictions on issue of debentures by a company.
7.Debenture Trust Deed is commonly executed.
8. Debentures are long term debt.Slide5
Difference between a Debenture and Share
1. Nature
2. Returns
3. Repayment
4. Charge
5. Voting Rights
6. Convertibility
7. Restriction on purchase by the companySlide6
Types of Debentures
1.
Security or Naked
Unsecured or Naked
Secured
2
.Tenure point of view
Redeemable
Irredeemable
3
. Mode point of view
Convertible
Non Convertible
4
.Registration point of view
Registered
BearerSlide7