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Is it advisable for a company to procure its finance by 100 equity share or 100 debenture share or 100 preference share or mixture of these 3 types comment with reason?
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What is the difference between preference share and debentures?
Debenture and Preference shares are often confused with each other,, Basically Preference share is an equity type instrument but debenture is a straight forward loan. Debenture bear fixed interest and its a TAX deductible expense. Company may goes into liquidation if it fails to pay interest on debenture. on the other hand company pay wish to choose not paying any dividend to preference share holder in any given period. debenture holder are lender to company Preference share holder owns the company
Is debenture holder a customer of the company?
NO,debenture holder is the creditor of the company
How can a company rise capital?
Company can mainly raise its capital by issuing equity or debt instrument e.g stocks bonds preference share debenture loans etc
Difference between debenture and preference share?
Preference shares are equity form of capital while debentures are debt form of capital both type of capital has preference to be paid before the normal share capital holders in case of liquidation but interest paid on debentures is tax deductable which means that by paying interest company can save tax as interest reduces the net income of company while preference share holders receive interest after tax deducted net profit.
What is aPrivate limited company?
Private limited company is a company which can not raise capital for business by issuing shares, preference shares, debenture in public and also can not go for IPO. The company's directors and promoters are not liable to pay liabilities in case of insolvency.
If someone holds a debenture what can they do with it?
With a debenture, a company can hold a debt with another. A debenture is a loan agreement where there is no collateral or assets involved. It is based on the promise and credit history of the company that it will be paid back.
Is A debenture holder of the company a creditor of the company?
No, A debenture bond owner is just like any other bond owner. A debenture bond is an uninsured bond. The owner of a bond is just lending their money to a company for a long-term period. A bond is an example of a long-term debt. An owner of a company would be an example of an equity such as a stockholder (common, or preferred).
Give cases in debenture company law?
i want to get some information about the debenture cases. thank you
What is the meaning and definition of redemption of debenture?
Redemption of Debenture was enacted into Indian law in 2000. It states that any Indian company with a debenture trust must also have a plan in place for its investors, in case of the company's failure.
What happens to a convertible debenture after liquidation of a company?
Its worthless.
What is Debenture Redemption Reserve?
Debenture is a debt instrument to raise funds. It has a maturity period associated with it. At the end of the maturity, the company(borrower) should return the interest and principal amount. Debenture Redemption Reserve is an amount kept as reserve for paying the debenture holder at the end of the maturity period.
Why debentures are not forfeited?
debenture is a loan to company and its face value will be higher moreover it carries fixed interest which is charge against profits.so there is no chance from the side of debenture holder for non payment of calls after repeated notices from the company. from the view point of company it cannot forfiet a debenture and treat it as a capital profit because they are not owners is this explanation coreect for that question?
