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Yes, a company can issue debentures with a pari passu clause. This clause ensures that the debentures rank equally with other debts in terms of repayment and claims on assets in the event of liquidation. It provides assurance to investors that they will be treated equally with other creditors, enhancing the attractiveness of the debenture issue. However, the specific terms and conditions must be clearly outlined in the debenture agreement.
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Can private company issue debentures?
YES!
Can public company issue debentures?
Yes
What do you mean by ex-interest in issue and redemption of debentures in company account?
Whan compay purchase debenture from the open market
What is issue of debentures?
The issue of debentures refers to the process by which a company raises capital by offering debt securities to investors. Debentures are essentially loans made by investors to the company, which promises to pay back the principal amount along with interest at specified intervals. This method of financing allows companies to access funds without diluting ownership, but it also imposes a legal obligation to make interest payments and repay the principal, regardless of the company's financial performance.
Why companies issue debentures?
Companies issue debentures to raise long-term capital without diluting ownership, as debentures are a form of debt financing rather than equity. This allows them to fund expansion projects, refinance existing debts, or invest in new opportunities while maintaining control over the company. Additionally, interest payments on debentures are tax-deductible, which can provide financial advantages. Overall, issuing debentures can be a strategic move to leverage growth while managing financial obligations.
Can company issue debenture with pari passu clause?
YES, a company can issue its debentures with a pari passu clause when they are issued in series. This implies that the debentures shall be paid proportionately. This assumes an added advantage when the company is short of cash & does not have the amount to make payment for debentures.In such case, all the debentures held by a creditor of the company ranked equal as regard charge and repayment with the others of that series. However, a company cannot give this right tto its new debentureholder of its old debentures unless it is expressly authorised to do so.
Can private company issue debentures?
YES!
Can public company issue debentures?
Yes
Why maturing debenture may cause problems for the company?
Ideally speaking it is not a problem for the company. All they have to do is, to pay back the investors who bought the Debentures at the time of issue. It can be a problem if the company does not have enough finances to pay off the investors whose Debentures are maturing.
Discount on issue of debentures is a?
capital loss to be written off over the tenure of the debentures .
What do you mean by ex-interest in issue and redemption of debentures in company account?
Whan compay purchase debenture from the open market
Under what conditions may the directors of acompany prefer to issue ordinary shares rather than debentures?
ordinary shares are equity whereas debentures are debt - debt is always payable, whereas, equity holders do not always necessarily demand a dividend payment immediately. it would depend on what the company wanted to use the funds for. if the funds were used to fund a project where the returns were not expected for a few years, a company may wish to issue shares rather than debentures as the debentures would have to be paid regardless of when the returns came.
Why companies issue debentures?
Companies issue debentures to raise long-term capital without diluting ownership, as debentures are a form of debt financing rather than equity. This allows them to fund expansion projects, refinance existing debts, or invest in new opportunities while maintaining control over the company. Additionally, interest payments on debentures are tax-deductible, which can provide financial advantages. Overall, issuing debentures can be a strategic move to leverage growth while managing financial obligations.
What are examples of Debentures?
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
What is capital subscription?
a public company can raise the required funds from the public by means of issue of shares and debentures. for doing the same,it has to issue a prospect which is an invitation to public to subscription to the capital of the company and undergo varous other formalities
Which company can issue debenture?
Any company, whether public or private, can issue debentures as a means of raising capital. However, it is more common for large corporations and public companies to issue them due to their ability to meet regulatory requirements and attract investors. Debentures are typically issued by companies with a stable financial position, as they are essentially a form of long-term debt that requires regular interest payments.
What is debenture explain in simple term?
Debentures refers to discharging the liability on account of debentures in accordance with the terms of issue.
