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Question
Explain the following term/concept.
Debentures
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Solution
Debentures are debt instruments issued by a company to raise capital. Debenture capital is the borrowed capital of a company. A debenture is an acknowledgement of the debt. Debentures are issued for a specific period and it carries a fixed rate of interest as a return on the investment in debentures.
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RELATED QUESTIONS
Select the correct answer from the options given below and rewrite the statement.
______ are the creditors of the company.
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An acknowledgement of debt issued by the company under its common seal.
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Debentures are always fully paid-up.
Find the odd one.
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In case of Registered Debentures, Interest ______ are used to pay interest.
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Company cannot issue debentures with ______ rights.
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____________ Debentureholders.
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____________ Power to issue debentures.
Explain the following term/concept.
Precise information
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The company secretary should take certain precautions while corresponding with debenture holders.
