Correspondence with Debentureholders — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeCorrespondence with Debentureholders4 Marks
Question
Interest is a debt.
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Answer
Debenture capital is the borrowed capital of the company.
Debenture holders are the creditors of the company receiving the fixed rate of interest.
The company pays the interest through interest warrant and electronic mode i.e. Electronic Clearing System (ECS) or National Electronic Fund Transfer (NEFT).
Interest is to be paid compulsorily even if the company makes a loss. It does not depend upon the profits of the company.
Thus, it is rightly justified that, interest is debt.
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