What is Debenture certificate?
Debenture Certificate is a document that certifies that the holder is the creditor of the company for the amount mentioned in the certificate. It is issued to all debenture holders. It is issued within a period of six months from the date of allotment of debentures.
What are the types of debenture?
The major types of debentures are:
- Registered Debentures: Registered debentures are registered with the company.
- Bearer Debentures:
- Secured Debentures:
- Unsecured Debentures:
- Redeemable Debentures:
- Non-redeemable Debentures:
- Convertible Debentures:
- Non-convertible Debentures:
What are the three types of debentures?
Companies use debentures when they need to borrow the money at a fixed rate of interest for its expansion. Secured and Unsecured, Registered and Bearer, Convertible and Non-Convertible, First and Second are four types of Debentures. Let us learn more about Debentures in detail.
What are registered debentures?
registered Debentures means any securities of the Company containing terms identical to the Debentures (except that such securities (i) will be registered under the Securities Act and (ii) will not contain terms with respect to transfer restrictions) that are issued and exchanged for the Debentures pursuant to the …
What are 3 types of debentures issued by company describe in detail?
Types of Debentures
- Redeemable and Irredeemable (Perpetual) Debentures.
- Convertible and Non-Convertible Debentures.
- Fully and Partly Convertible Debentures.
- Secured (Mortgage) and Unsecured (Naked) Debentures.
- First Mortgaged and Second Mortgaged Debentures.
- Registered Unregistered Debentures (Bearer) Debenture.
What is debenture example?
What is a Debenture? A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income. Examples of debentures are Treasury bonds and Treasury bills.
How are debentures classified on the basis of registration?
The debentures are classified on the basis of security, as secured and unsecured. Secured debentures are secured by a charge upon some or all assets of the company. These charges may be fixed or floating. If the charge is fixed the assets cannot be sold without the consent of the debenture-holders.
What are debentures in India?
Debentures are long-term financial instruments issued by a company for specified tenure with a promise to pay fixed interest to the investor. NCD investment can be held by individuals, banking companies, primary dealers other corporate bodies registered or incorporated in India and unincorporated bodies.
What are the various kinds of debentures in company law?
Debentures in company law may refer to secured debentures, unsecured debentures, registered debentures, bearer debentures, redeemable debentures, irredeemable debentures, and convertible debentures. Businesses usually raise capital by issuing shares in the company or by borrowing from lenders.
What are registered debentures Class 12?
Registered debentures are those which are duly recorded in the register of debenture holders maintained by the company and are transferred through an instrument of transfer. Bearer debentures are the debentures which are transferable by mere delivery.
What is the minimum subscription?
Minimum subscription refers to the minimum amount which a company should raise at the time of issuing capital. The requirement for minimum subscription applies to all companies which raise funds from the public. Hence, in keeping with the expectations of the investors, the issue of capital should be halted.
What are debentures used for?
Debentures. Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.
What kind of certificate is a debenture?
Debentures are issued by a company and are usually in the form of a certificate, which is an acknowledgment of indebtedness. It is issued under the company’s seal.
What is the categorisation of a debenture depends on?
The debenture categorisation depends on their redemption, tenure, convertibility, security, mode of redemption, type of interest rate, coupon rate, demonstrability, etc ., #1. From the Point of view of Security
Why are debentures considered as good as currency notes?
They are considered as good as currency notes due to their easy transferability. The interest and principal are paid to the person who produces the coupons, which are attached to the debenture certificate. and the certificate respectively. Fixed rate debentures have a fixed interest rate over the life of the debentures.
How are Debenture holders not owners of the company?
Debenture holders do not get any voting rights. This is because they are not instruments of equity, so debenture holders are not owners of the company, only creditors The interest payable to these debenture holders is a charge against the profits of the company.