Question
Give the meaning of debenture.
Solution
1. Debentures denote borrowing by a company and represent its loan capital. Debentureholders are creditors of the company. A debenture is a document or certificate issued by a company as a proof of the money lend to it by the holder. It is an acknowledgement of debt as well as an undertaking to repay the specified sum with interest on or before the prescribed date.
2. A debenture is a certificate issued by a company under its common seal as acknowledgment of debt with or without a charge on the company’s assets.
3. Interest on debentures is paid at a fixed rate and it is payable periodically until the maturity and repayment of debentureholders.
2. A debenture is a certificate issued by a company under its common seal as acknowledgment of debt with or without a charge on the company’s assets.
3. Interest on debentures is paid at a fixed rate and it is payable periodically until the maturity and repayment of debentureholders.
