1. It is an instrument in writing. An oral promise in acknowledgement of a debt is not a debenture.
2. It is an acknowledgement of the indebtedness of the company to its holder for the amount stated in it.
3. It is usually under the seal of the company but it is not necessary. A certificate signed by two directors of a company and without bearing the company's seal is a valid debenture.
4. It is one of a series of like debentures. But a single debenture may be issued to one man.
5. It provides for the payment fixed sum with interest of a specified rate by a specified time. But this is not essential because a company may issue perpetual debentures. Section 120 of the companies' act 1956 expressly provides for the issue of perpetual or irredeemable debentures w3hich are made payable only in the event of a winding up or some serious default with the company.
6. It is generally secured by a charge, fixed or floating on any part of the company's property or undertaking. But this is, however, not an essential condition because section 2(12) provides that the debentures may or may not constitute a charge on the assets of the company.
From
Rohit Mathur Jaipur
What are the risk relating to th debentures?
the companies that have issued debentures in recent years.give suggestions to make debentures more popular?
interest paid for debentures is a/an
recently which industry/company had issued its debentures
capital loss to be written off over the tenure of the debentures .
recently which industry/company had issued its debentures
history of secured redeemable non convertible debentures
debit redemption of debentures accountcredit cash / bank
Differentiate between a bearer debentures and convertible notes
Recently Engro Pakistan sold debentures to general public!
Redeemable debentures are those securities which are to be repaid within a stipulated period / maturity period. For instance, X co issued 9% 7 years $ 1000 Debentures. This issue of debentures has coupon rate of 9% per year and redeemable period of 7 years. The amount raised by issuing thses debentures are to be repaid within 7 years from now.
Debentures refers to discharging the liability on account of debentures in accordance with the terms of issue.