Question

Justify the following statement:

A company can issue only certain types of debentures.

Answer 1

1. A company can issue secured as well as unsecured debentures. It can also issue non-convertible debentures or debentures which can be converted fully or partly into equity shares.
2. The Board of Directors of a company have the authority to issue debentures. All debentures are redeemable i.e, have to be repaid.
3. The company can issue debentures to its members or make a public offer or offer it even through private placement.
4. Thus, it is rightly justified that, a company can issue only certain types of debentures.