Difference betwen debentures and bonds
Answer Posted / harshit purwar
Debentures are the first creditor of the company.At the
time of liquidation they get the second right after the
creditor having charged on fixed assets.They get the
interest @ fixed rate whether comany earn profit or not.On
debentures company get the benefit of tax.Bonds are just
like commercial paper.The company which issues is the
debtor and the person who buys is the creditor of that
company.Creditor will get interest periodically as per
agreement and the principle amount is received on
maturity.For issuing bond no prospectus is issued and no
trustees are appointed as in debentures for the sake of
debentures.
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