Difference between preference share and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders.
2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company.
3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders.
Types of debentures in company law?
What is a Debenture?
A Debenture is a debt security issued by a company (called the Issuer), which offers to pay interest in lieu of the money borrowed for a certain period. In essence it represents a loan taken by the issuer who pays an agreed rate of interest during the lifetime of the instrument and repays the principal normally, unless otherwise agreed, on maturity.
These are long-term debt instruments issued by private sector companies. These are issued in denominations as low as Rs 1000 and have maturities ranging between one and ten years. Long maturity debentures are rarely issued, as investors are not comfortable with such maturities
Debentures enable investors to reap the dual benefits of adequate security and good returns. Unlike other fixed income instruments such as Fixed Deposits, Bank Deposits they can be transferred from one party to another by using transfer from. Debentures are normally issued in physical form. However, corporates/PSUs have started issuing debentures in Demat form. Generally, debentures are less liquid as compared to PSU bonds and their liquidity is inversely proportional to the residual maturity. Debentures can be secured or unsecured.
What are the different types of debentures?
Debentures are divided into different categories on the basis of: (1)convertibility of the instrument (2) Security
Debentures can be classified on the basis of convertibility into:
· Non Convertible Debentures (NCD): These instruments retain the debt character and can not be converted in to equity shares
· Partly Convertible Debentures (PCD): A part of these instruments are converted into Equity shares in the future at notice of the issuer. The issuer decides the ratio for conversion. This is normally decided at the time of subscription.
· Fully convertible Debentures (FCD): These are fully convertible into Equity shares at the issuer's notice. The ratio of conversion is decided by the issuer. Upon conversion the investors enjoy the same status as ordinary shareholders of the company.
· Optionally Convertible Debentures (OCD): The investor has the option to either convert these debentures into shares at price decided by the issuer/agreed upon at the time of issue.
On basis of Security, debentures are classified into:
· Secured Debentures: These instruments are secured by a charge on the fixed assets of the issuer company. So if the issuer fails on payment of either the principal or interest amount, his assets can be sold to repay the liability to the investors
· Unsecured Debentures: These instrument are unsecured in the sense that if the issuer defaults on payment of the interest or principal amount, the investor has to be along with other unsecured creditors of the company.
What is the advantages and disadvantages of debentures?
You get a fixed preannounced return on your investment.
You do not gain from the performance of the company.
You may be affected by the inability of the company to honor its commitment to you by way of payment.
You have a priority claim over the shareholders in case of a company going bankrupt. Country specific laws apply.
Some debentures are converted into equity shares after a specific period
Note: Please read the terms and conditions carefully.
How do you make the debenture more popular?
the companies that have issued debentures in recent years.give suggestions to make debentures more popular?
What is Three basic reasons is profit maximization inconsistent with wealth maximization?
Profit maximization is a narrow view which accounts for only the difference between sales and costs
Wealth Maximization is broader and more philosophical in approach.
Wealth maximisation includes not exhaustively culture , synergy, value, potential and wealth
What are registered debentures?
Certain debentures are made out in the names of the particular persons whose names appear in the register of debenture holders. Such debentures which appear in this register are known as "Registered Debentures".
They are transferable in the same way as shares. Interest as well as the debenture amount in these cases is payable only to the registered holders.
What is a private offset bond or private discharging and indemnity bond held by the us treasury?
"a fraud. " Probably in the opinion of some type of agent of the banking cartel, like any lawyer or judge.
If this is really a fraud, it would have an intent to deceive and bring unjust enrichment. The only people who would regard it as deceptive would be those who don't understand it and those who can't admit the truth, usually due to prior obligations. Since 1933 the United States has not had lawful money, but only IOU's borrowed at interest from private persons, the secret owners of the Federal Reserve system. Any IOU's can be used to discharge debt; to require the use of Federal Reserve Notes (FRN's) would be involuntary servitude, which is illegal, but the covert goal of the current financial system. It is the system of forcing everyone to use interest bearing IOU's as the "official" exchange medium that is fraud, but the private entities that benefit control every government as its ultimate creditors. Cross those entities and presidents get assassinated and countries get invaded (by proxies, and for falsely stated reasons.)
The bond being asked about is deposited with Treasury to offset any debts collateralized by your birth certificate application, or any other government document or interaction associated with your name, and also to collateralize any future bonds you might create, say of court cases, to secure payment of utilities, and for any bonded promissory notes you might issue to discharge debts. You're legally entitled to do this (HJR 192 of 6/5/1933) else a lot of powerful people would be guilty of fraud, theft, and receiving stolen property. By charging you with fraud for filing this, they are trying to have it both ways, or just testing you. Cases where a successful defense was mounted have doubtless been sealed, as have right to travel cases, so you can't use them as precedent. Lawyers and judges owe their primary allegiance to the British Crown and will do nothing to help you, despite any pretense they may make to get paid. You'll have to do your defense yourself. Succeed and you'll probably be pressed to sign a non-disclosure agreement and given a bottomless credit card. I believe death is the penalty if you violate this, and that a similar agreement is taken from judges and lawyers, simply to enter their profession.
If the real money is ever returned, which is highly unlikely, you'll pay off any bonds or other debt instruments you've issued out of your share. Until then, nobody can pay a debt, but only discharge it by issuing a new debt instrument. Doing this will bring illegitimate charges of fraud from the system. Look up 'accepted for value', 'banker's acceptance', "Modern Money Mechanics", and the "Walker Todd Affidavit", for the official explanation, the latter two of which you may need to enter into evidence. A jury trial in admiralty seems advisable, and maybe an "ecclesiastical deed poll" would be of help to eliminate jurisdiction altogether. Good Luck.
LEGAL INFORMATION IS NOT LEGAL ADVICE. YOU'LL BE HELD PERSONALLY RESPONSIBLE FOR ALL THAT YOU DO.
What are the advantages and disadvantages of shares and debentures?
Shares offer the advantage of potential capital appreciation and dividends, giving investors a stake in the company's growth and profits. However, they come with higher risk, as shareholders may lose their investment if the company underperforms. Debentures provide fixed interest returns and are generally less risky, as they have priority over shares in the event of liquidation. On the downside, debentures typically offer lower returns compared to shares and lack the potential for capital gains.
In the case of Salomon v. Salomon & Co. Ltd., the House of Lords held that Mr. Broderip should not be paid on the debenture he had purchased from Mr. Salomon. The decision was unanimous among the judges, with all five Law Lords agreeing that the company was a separate legal entity and that the debenture was void. Therefore, Mr. Broderip's claim was dismissed.
What is the difference between debenture and a Treasury note?
A debenture is a type of debt instrument that is not secured by physical assets or collateral, typically issued by corporations to raise capital, and it relies on the issuer's creditworthiness for repayment. In contrast, a Treasury note is a government-issued debt security with a fixed interest rate and a maturity of 2 to 10 years, backed by the full faith and credit of the U.S. government. While both are used for borrowing funds, debentures carry a higher risk compared to Treasury notes, which are considered one of the safest investments.
What is the definition of debenture?
an unsecured loan certificate issued by a company, backed by general credit rather than by specified assets.
Debentures function more or less like bonds. One can also term debentures as a variant of bonds. Debentures are issued by a company which offers to pay interest in lieu of the money borrowed for a pre-specified period. In essence, it represents a loan taken by the issuer who pays an agreed rate of interest throughout the life of the instrument and repays the principal normally, unless otherwise agreed, on maturity. Bonds on the other hand are more secured than debenture. As a debenture holder, you provide unsecured loan (most of the times debentures are unsecured in nature) to the company. Debentures carry a higher rate of interest as the company does not offer any collateral to you for your money. For this reason bond holders receive a lower rate of interest but are more secure in nature.
What are the right of debenture holder?
To receive interest/redemption in due time.
To receive a copy of the trust deed on request.
To apply for winding up of the company if the company fails
to pay its debt.
To approach the Debenture Trustee with your grievance.
You may note that the above mentioned rights may not necessarily be absolute. For example, the right to transfer
securities (in physical mode) is subject to the company's right to refuse transfer as per statutory provisions.
What are the disadvantages of debentures?
Debentures hold greater risk because the company could eventually go out of the business. so this type of investment should be done very carefully.
What are the differences between investor and share holder?
they are both the same. An investor may have been in early before shares were public but they still own shares. An investor is someone who uses his money to make more money. There are about a billion kinds of investments--you could loan money to buy cars, purchase investment properties, buy bonds, whatever. Shareholders are investors who buy stocks.
What are the differences between share and debenture?
SHARES- 1.share holder is the real owner of the company.share holder have not fixed dividend rate.share holder have not maturity period.share are not redeemed.shares are more volatile.share holder have high risk.share holder have high return.share holder have right on residial income.
DEBENTURE-1.debenture holder is the creditor of a company.they have fixed rate of interest.they have a maturity period.they dont have right to vote.debentures are redeemed.they are not volatile.they have no risk.they have low return.