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Question
With reference to business finance, explain the following : Debentures
Solution
A debenture is an instrument of written acknowledgment of debt under the common seal of the company.
It consists of the contract for repayment of the money borrowed after a specific time and at a specified rate of interest. The person holding this written acknowledgment is called Debenture holder.
According to section 2 (12) of the Indian Companies Act, Debenture includes debenture stock, bonds and any other securities of a company whether constituting a charge on the assets of the company or not.
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