- What are the different types of debenture?
- What does a debenture mean?
- What are the difference between shares and debentures?
- What is Debenture with example?
- Are debentures liabilities?
- Which of the following is not a characteristic of bearer debentures?
- Are debentures transferable?
- What is negotiable instrument and its types?
- What is debenture issued as collateral security?
- What are the four types of negotiable instruments?
- What are the benefits of debentures?
- Why do companies issue debentures?
- Who is a debenture holder?
- What are the characteristics of debenture?
- Which debentures are treated as negotiable instrument?
- What do you mean by bearer debentures?
- What are irredeemable debentures?
- What are the advantages of debentures?
What are the different types of debenture?
The major types of debentures are:Registered Debentures: Registered debentures are registered with the company.
Bearer Debentures: …
Secured Debentures: …
Unsecured Debentures: …
Redeemable Debentures: …
Non-redeemable Debentures: …
Convertible Debentures: …
Non-convertible Debentures:More items…•.
What does a debenture mean?
A debenture is a type of debt instrument that is not backed by any collateral and usually has a term greater than 10 years. Debentures are backed only by the creditworthiness and reputation of the issuer. Both corporations and governments frequently issue debentures to raise capital or funds.
What are the difference between shares and debentures?
Shares are the company-owned capital. Debentures are the borrowed capital of the company. The person who holds the ownership of the shares is called as Shareholders. The person who holds the ownership of the Debentures is called as Debenture holders.
What is Debenture with example?
The definition of a debenture is a long-term bond issued by a company, or an unsecured loan that a company issues without a pledge of assets. … An interest-bearing bond issued by a power company is an example of a debenture.
Are debentures liabilities?
Debenture bonds are liabilities of the company because they represent debts that will have to be repaid in the future. … Because debenture bonds fall into this category, they are placed on the balance sheet in the long-term liabilities section.
Which of the following is not a characteristic of bearer debentures?
Which of the following is not a characteristic of Bearer Debentures ? They are treated as negotiable instruments. Their transfer requires a deed of transfer. They are transferable by mere delievery.
Are debentures transferable?
Debentures are freely transferable by the debenture holder. Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures.
What is negotiable instrument and its types?
A Negotiable Instrument is that document that includes a ‘promise to pay’ a certain amount of money to the bearer of the document. … Negotiable Instruments are always in written form. Examples of Negotiable instruments are- a cheque, a promissory note, a bill of exchange.
What is debenture issued as collateral security?
Issue of Debentures as Collateral. Debentures issued as collateral security is secondary or parallel security for the original loan taken by the company. The lender can realize the collateral security in case borrower fails to make the payment of the original loan.
What are the four types of negotiable instruments?
There are many types of negotiable instruments….The common ones include personal checks, traveler’s checks, promissory notes, certificates of deposit, and money orders.Personal checks. … Traveler’s checks. … Money order. … Promissory notes. … Certificate of Deposit (CD)
What are the benefits of debentures?
The following are the advantages of debentures:Secured investments. Debentures provide greatest security to the investors. … Fixed return. Debentures guarantee a fixed rate of interest.Stable prices. … Non-interference in management. … Economical. … Availability of funds. … Regular source of income.
Why do companies issue debentures?
Why do company issue debentures, when they can borrow money from Bank. Debentures are loan which company borrow’s from general public . … ex- borrowed fund can be used only for capital expenditure or they limit companies ability to raise additional funds till this loan is repaid.
Who is a debenture holder?
A person having the debentures is called debenture holder whereas a person holding the shares is called shareholder. … A shareholder or member is the joint owner of a company; but a debenture holder is only a creditor of the company. Shareholders are invited to attend the annual general meeting of the company.
What are the characteristics of debenture?
Characteristics of Debenture1.1 Written promise.1.2 Company Seal.1.3 Borrowed Funds.1.4 Maturity Period.1.5 Claim in Income.1.6 Priority Claim on Assets.1.7 No Controlling Power.1.8 Fixed Rate of Interest.More items…•
Which debentures are treated as negotiable instrument?
Bearer debentures are payable to the bearer and are transferable by mere delivery. They are negotiable instruments, and the company keeps no records in respect of them. Interest coupons are attached to them and interest is paid to a person who produces the coupons.
What do you mean by bearer debentures?
The debentures which are payable to bearer and whose names do not appear in the register of debenture holders are known as “Bearer Debentures”. Coupons for interest are attached to the document and interest is paid to the holders as it falls due. Bearer Debentures are transferably by mere delivery.
What are irredeemable debentures?
Put simply, an irredeemable debenture is a tool used to outline the conditions of a loan agreement. In this case, there is no specific time period in which the borrower must pay the lender back. Typically, such a loan would continue until a ‘contingent event’ such as insolvency or the company winding up.
What are the advantages of debentures?
The use of debentures can encourage long-term funding to grow a business. It is also cost-effective when compared with other forms of lending. Debentures usually provide a fixed rate of interest for the lender, and this has to be paid before any dividends are issued to shareholders.