Question

Suggestion about debenture?

Answer 1

HEYA MATE HERE'S YOUR ANSWER,

A debenture is a document that either creates a debt or acknowledges it.

As per section 2(12) of Companies Act 1956/Section 2(30) of the Companies Act 2013 “Debenture includes debenture stock, bond and any other securities of the company whether constituting a charge on the company’s assets or not”.

Simply, it can be stated that issue of debenture means collection of money from people by the company for the specified purpose. The company issues a certificate of debenture and receives money against it.

Unlisted debentures are type of interest paying investments . Companies provide them as a way to raise funds from investors. In returns for your money, the company promise to make regular payments and return the money you lent them on a date in the future.

Unlisted debentures usually offer higher interest rate than bank deposits but also carry higher risks.

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Answer 2

A debenture is a type of debt that companies get into. As a loan, debentures are not secured by any physical assets of the organization. They can be sold to the public in form of bonds. Since they are non-securitized debts, debentures are often backed by the reputation and financial security of the borrower.