Question

With reference to business finance, explain the following:

Debentures

Answer 1

• A debenture is an instrument of written acknowledgment of debt under the common seal of the company.
• It consists of the contract for repayment of the money borrowed after a specific time and at a specified rate of interest. The person holding this written acknowledgment is called a debenture holder.
• According to section 2 (12) of the Indian Companies Act, Debenture includes debenture stock, bonds, and any other securities of a company, whether constituting a charge on the assets of the company or not.