Debentures
Companies raise substantial amount of long term funds through the issue of debentures. The amount to he raised by way of loan from the public is, divided into small units called “Debentures”. Debenture may be defined as written instrument acknowledging a debt issued under the seal of company containing provisions regarding the payment of interest, repayment of principal sum. charge on the assets of the company etc. According to Sec. 2(12) of the companies Act ‘debenture includes debenture stock, bonds and any other securities whether constituting a charge on the assets of the company or not”.
Capital IQ Interview Questions
Features of Debentures:
1) It is a debt takes by the company from public and financial institutions.
2) Generally, debentures are issued for long period of time.
3) Debentureholders are entitled to receive periodical payment of interest (usually six months) at a fixed rate.
4) Interest on debentures has to he paid irrespective of profit.
5) Debenture holders arc entitled the repayment of the amount lent as per the terms of contract
6) Debentureholders don't have voting rights.
7) Generally dehentureholders have fixed or floating charge on the assets of the company
Companies raise substantial amount of long term funds through the issue of debentures. The amount to he raised by way of loan from the public is, divided into small units called “Debentures”. Debenture may be defined as written instrument acknowledging a debt issued under the seal of company containing provisions regarding the payment of interest, repayment of principal sum. charge on the assets of the company etc. According to Sec. 2(12) of the companies Act ‘debenture includes debenture stock, bonds and any other securities whether constituting a charge on the assets of the company or not”.
Capital IQ Interview Questions
Features of Debentures:
1) It is a debt takes by the company from public and financial institutions.
2) Generally, debentures are issued for long period of time.
3) Debentureholders are entitled to receive periodical payment of interest (usually six months) at a fixed rate.
4) Interest on debentures has to he paid irrespective of profit.
5) Debenture holders arc entitled the repayment of the amount lent as per the terms of contract
6) Debentureholders don't have voting rights.
7) Generally dehentureholders have fixed or floating charge on the assets of the company
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