Debenture Protect For Free

Debentures, however, are typically debt instruments that aren't secured by the personal assets or any form of collateral. Debentures are backed only by the reputation of the borrower and bond issuer's reputation unless noted as being secured when issued.

Treatment of Interest on Debentures It is a charge against profit. Interest payment may be subject to tax deducted at source (TDS). We show Interest on Debentures as 'Finance Cost' in Statement of Profit and Loss.

A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income.Examples of debentures are Treasury bonds and Treasury bills.

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, debentures must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.

Companies Act 1956 has made certain provisions to protect the interest of Debenture holders. 1) A company who accepts funds from debenture holders shall appoint one or more debenture trustees and it should be mentioned in Prospectus or Letter of Offer.

In the event of winding up, debentures get priority of repayment over shares. Shares cannot be converted as opposed to debentures are convertible. There is no security charge created for payment of shares. Conversely, security charge is created for the payment of debentures.

In debenture, the public lends its money to the company in return for a certificate promising a fixed rate of interest. In loans, the lending institutions are banks and other financial institutions.