Issue of Debentures — Secretarial Practice STD 12 Commerce / Arts — Question

• According to Section 82 of Companies Act, “Debenture to any member of the company is a movable property, transferable in the manner provided by the Articles of Association:
• According to the Oxford dictionary “Debenture is a certificate issued by a company act now leading that it has borrowed money on which interest is being paid”.

Meaning:

• The word ‘Debenture’ is derived from the Latin word ‘Debere’- which means to owe something to someone.
• It is a proof of loan taken by the company on certain terms and conditions.
• It can be issued by public or private companies to raise borrowed capital.
• A person who purchases it is called a debenture holder and he is a creditor of a company.
• It can be issued at par, premium, and discount.
• The Board of Directors has the power to issue debentures.
• Debenture holders get a fixed rate of interest on their investments.