Issue of Debentures — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeIssue of Debentures4 Marks
Question
A company can issue only certain types of debentures.
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Answer
The debenture holders are the creditors of the company. They offered borrowed capital to the company but cannot participate in the management of the company.
Therefore, in order to protect the interest of debenture holders, SEBI, through its guidelines allowing companies to issue certain types of debentures in India.
Therefore, the companies operating in India can issue secured debentures, convertible debentures, redeemable debentures to the applicant.
It protects the interest of creditors in the company.
Thus, it is rightly said that a company can issue only certain types of debentures.
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