1 / 7

Issue of Debentures

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. . Definitions.

dori
Download Presentation

Issue of Debentures

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 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.

  2. 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.”

  3. 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.

  4. 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.

  5. 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 company

  6. 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 Bearer

More Related