while starting of business the company need large amount of
investment. the company borrow funds from banks or other
financial institutions.debentures is a long term liablity
these are the creditors to the company and the company pay
some fixed percentage of interest to the debenture holders.
debenture means "when company needs a huge capital to start
a business and its impossible to company to stand such a
huge capital. co. borrows funds from public or financial
institutiom, on which company pay the fix rate of intrest
is known as a debentures.........it is also called as a
borrowed capital of a company
it is borrowed capital of company .a debenture is a secured
to the debenture holder's hands & it can be refundable to
them with certain rate of interest.debenture capital is a
borrowed capital of the company.debentures are reedeemed
after certain predefined period.
debentures is a kind of loan taken by the company ,who
issues a document with the seal to the investor,and pay
them a fixed rate of dividend.every company requires money
to start up their business, so it issues shares and
debentures for the collection of funds.
A DEBENTURE is a credit instrument isued by a company in
acknowledgement of loan received.A co. may raise long term
finance at any time by issuing debentures.Debentures carry
fixed rate interest and are normally repayable at the end
of the period for which loan is taken.
Debenture is liability to the company. When shareholders's
amount or capital is not enough to run the business or
company requires more amount, then company borrows the
required amount in the form of debenture. Debenture holders
are creditors to the company while shareholders are the
owner of the company in proportion to their shares they are
liable to bear profits as well as losses. While debenture
holder are safe they are liable to get a certain amount of
benefit for their investment + their principal amount after
finishing the period of loan.
If Company becomes insolvent so debenture holders are paid
first their amount after comes the shareholder in short
debenture holders are much safer than share holder they are
not responsible for the losses they are giving one kind of
loan to the company.
A debenture is an acknowledgement of a debt,given under the
seal of the company and constituting a contract for the
payment of principal sum on a specified date and for the
payment of interest at a fixed rate percent till the
principal sum is repaid..........
Debenture is an instrument which is used for fundraising by
large companies from public/private financial
institutions.it is also called borrowed capital.the company
give some fixed rate of interest over these debenture to
the debenture holders.
Debenture are not secured by any physical asset or
colletaral.it is only backed by the creditworthness or
reputation of the company whom offered the debentures.