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Secretarial Practice · Class 12 Commerce

Ch 4Issue of Debentures — Class 12 Secretarial Practice, concept-first.

A company that has exhausted the goodwill of its own shareholders, or simply wants to raise capital without diluting ownership and control, turns to debt — and the principal instrument through which a joint stock company borrows medium- and long-term money from the investing public is the debenture.

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Key concepts

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Meaning and Features of a Debenture

A debenture, defined inclusively under Section 2(30) of the Companies Act, 2013 to cover debenture stock, bonds and any other debt-evidencing instrument, is a certificate acknowledging a loan the company has taken and pr…

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Chapter contents

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Meaning and Features of a Debenture

A company that has exhausted the goodwill of its own shareholders, or simply wants to raise capital without diluting ownership and control, turns to debt — and the principal instrument through which a…

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Types of Debentures

Debentures are classified on several independent bases at once, and any single debenture issue is usually described by combining one term from each basis — for example, a company may issue "secured, r…

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Provisions for Issue of Debentures under the Companies Act, 2013

The issue of debentures is governed chiefly by Section 71 of the Companies Act, 2013, read with the Companies (Share Capital and Debentures) Rules, 2014, and a Std 12 Secretarial Practice student shou…

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Conditions and Procedure for Issue of Debentures

Debentures, like shares, may be issued on any one of three price conditions relative to their face value.

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Redemption of Debentures

Redemption of debentures is the repayment, by the company, of the principal amount borrowed against the debentures, on or before the date agreed at the time of their issue, discharging the company's l…

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Distinction: Shares and Debentures

A share and a debenture are both instruments through which a joint stock company raises capital, and a Secretarial Practice examination frequently tests a student's ability to distinguish the two prec…

Exercises

+Show 10 questions10 questions
  1. Q1What is a debenture? Explain its main features.Free
  2. Q2Explain the different types of debentures on the basis of security and convertibility.Free
  3. Q3Explain the different types of debentures on the basis of redemption and mode of transfer.Free
  4. Q4State the provisions of the Companies Act, 2013 regarding the issue of debentures.Preview
  5. Q5Explain the conditions under which debentures may be issued and redeemed.Preview
  6. Q6Explain the procedure for the issue of debentures by a public company.Preview
  7. Q7Explain the various methods of redemption of debentures.Preview
  8. Q8Distinguish between shares and debentures.Preview
  9. Q9Write short notes on: (a) Debenture Trust Deed and Debenture Trustee (b) Debenture Redemption Reserve.Preview
  10. Q10Choose the correct option and justify: A debenture-holder of a company is its ________. (a) Owner (b) Creditor (c) Customer (d) EmployeePreview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 25 questions25 questions
  1. Q1Secured debentures must be redeemed within ______ from the date of their issue. (a) 10 days (b) 10 years (c) 15 yearsPreview
  2. Q2Correct the underlined word and rewrite the following sentence: To rate its debentures a company appoints **underwriters** .Preview
  3. Q3Study the following case/situation and express your opinion. | Sunflower limited company proposes to issue debentures to the public to raise…Preview
  4. Q4Briefly explain the provisions of Companies Act, 2013 for issue of debentures.Preview
  5. Q5Debenture capital is a ______ capital of a company. (a) Borrowed (b) Owned (c) PermanentPreview
  6. Q6Find the odd one. (a) Secured Debentures (b) Convertible debentures (c) Irredeemable debenturesPreview
  7. Q7Distinguish between the following: Shares and DebenturesPreview
  8. Q8Justify the following statement: A company can issue only certain types of debentures.Preview
  9. Q9A company can issue ______ convertible debentures. (a) Only partly (b) Only fully (c) Partly or fullyPreview
  10. Q10Debenture capital is a ______ capital of a company. (a) Borrowed (b) Owned (c) PermanentPreview
  11. Q11Study the following case/situation and express your opinion. Violet Ltd. company plans to raise ₹ 10 crores by issuing debentures. The Board…Preview
  12. Q12Justify the following statement: A company has to create charge on its assets for issuing secured debentures.Preview
  13. Q13Briefly explain the provisions of Companies Act, 2013 for issue of debentures.Preview
  14. Q14Write a word or a term or a phrase which can substitute the following statement. Period within which debenture certificate must be issued by…Preview
  15. Q15Justify the following statement: Debenture trustees are appointed by a company issuing debentures.Preview
  16. Q16Define debenture.Preview
  17. Q17Explain Features of Debentures.Preview
  18. Q18Write a word, or a term, or a phrase which can substitute for the following statement. Documentary evidence of holding the debentures.Preview
  19. Q19Correct the underlined word and rewrite the following sentence: The details of debentureholders are entered in the **Register of Members** .Preview
  20. Q20Explain the following term/concept. Debenture CertificatePreview
  21. Q21Justify the following statement: Debenture trustees are appointed by a company issuing debentures.Preview
  22. Q22What is a Debenture?Preview
  23. Q23Discuss the different types of debentures.Preview
  24. Q24Distinguish between the following: Shareholder and Debenture HolderPreview
  25. Q25State with reasons whether the following statement is True or False: Bondholders are not owners of the company.Preview