Question

Study the following case/situation and express your opinion.

Violet Ltd. company plans to raise ₹ 10 crores by issuing debentures. The Board of Directors has some queries. Please advise them on the following:

1. Can they issue convertible debentures? 
2. As the company is offering debentures to its members, can such debentures have normal voting rights?
3. Capital raised by issuing debentures will be Owned Capital or Borrowed Capital?

Study the following case/situation and express your opinion:

Anushka Ltd. Company plans to raise 10 crores by issuing debentures. The Board of Directors have some queries. Please advise them on the following:

1. Can the company issue convertible debentures?
2. As the company is offering debentures to its members, can such debentures have normal voting rights?
3. Capital raised by issuing debentures will be Owned Capital or Borrowed Capital?

Answer 1

1. Yes, they can issue convertible debentures.
2. No, debentures do not have normal voting rights. Voting rights are typically associated with equity shares, not debt instruments like debentures.
3. Capital raised by issuing debentures will be Borrowed Capital. This is because debentures represent a loan from the debenture holders to the company and must be repaid.