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Secretarial Practice Explain the following term/concept in detail:

Correspondence with Debentureholders · Maharashtra Board STD 12 Commerce / Arts (MSBSHSE - English Medium). 10 questions.

Questions

Explain the following term/concept in detail:

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10 questions · self-marked practice — reveal the answer and mark yourself.

Question 12 Marks
Debenture Certificate
Answer
  • A debenture Certificate is an acknowledgment of debt given to the company.
  • It is issued under the common seal and signature of two directors of the company as a witness.
  • It contains the name of the Debenture holder, number of Debentures, type of Debenture, rate of interest, maturity, etc.
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Question 22 Marks
Courtesy
Answer
  • Courtesy means politeness.
  • The secretary has to be polite while corresponding with debenture holders. Due respect should be given to them being the Creditors of the company.
  • The language in the letter should be courteous. Rude and harsh words should be avoided.
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Question 32 Marks
Precise Information
Answer
  • Precise information refers to providing timely and up-to-date information.
  • The data given in the letter must be accurate and based on factual information.
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Question 42 Marks
Conciseness
Answer
  • Conciseness refers to avoiding irrelevant and unnecessary information.
  • As far as possible the letter should be brief, short, and to the point so that, the reader should develop an interest in reading it.
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Question 52 Marks
Interest Warrant
Answer
  • An interest Warrant is an instrument or payment of interest to the Debenture holders.
  • It is like a crossed cheque that can be encashed through the Debenture holder’s bank account.
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Question 62 Marks
Conversion of Debentures
Answer
  • Conversion of Debentures means converting Debentures into equity shares.
  • Convertible Debentures are those Debentures that are not repaid on maturity but converted into equity shares.
  • Before conversion, they enjoy all rights of creditors whereas after conversion they get all benefits of the owner.
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Question 72 Marks
Redemption of Debentures
Answer
  • Redemption means repayment.
  • Debenture represents borrowed capital of the company and hence, it has to be repaid.
  • Redeemable Debentures are repaid at the time of maturity. It is medium-term capital.
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Question 82 Marks
Interest on Debentures
Answer
  • The returns paid on investment in Debentures are known as ‘Interest’.
  • The Rate of interest on Debentures is decided at the time of issue of Debentures.
  • Debenture holders get a fixed rate of interest which does not depend upon the profit of the company.
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Question 92 Marks
Debenture holder
Answer
  • The person who buys Debentures of the company is known as ‘Debenture holders’.
  • The debenture holder is the creditor of the company and has no right to participate in the management of the company.
  • They get a fixed rate of interest as a return on their investment
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Question 102 Marks
Debentures
Answer
  • Debentures represent the borrowed capital of the company.
  • A debenture is an acknowledgment of debt given to the company.
  • Debenture Capital is also known as the ‘Supporting Capital’ of the company.
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