Debenture-holders are the subscribers to debentures. Debentures are part of loan, so a debenture holder is only a creditor of the company.

What is right debenture?

In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest.

Do debenture holders have voting rights?

Debenture holders have no rights to vote in the company’s general meetings of shareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures.

Who can be debenture trustee?

Who can be appointed a Debenture Trustee? To act as debenture trustee, the entity should either be a scheduled bank carrying on commercial activity, a public financial institution, an insurance company, or a body corporate. The entity should be registered with SEBI to act as a debenture trustee.

Why do debenture holders not have any voting rights?

Debentures are primary in order to pay interest expenses by a fixed rate. In a company’s general meetings of shareholders, debenture holders have no voting rights as they may have separate meetings or votes. Debentures reduce the burden of income tax, as the interest is charged against profit and loss account.

What is the purpose of a debenture Trust Deed?

A debenture trust deed is a debt instrument that is accompanied by a contract for repayment from the company issuing the debt. The company receives cash to fund its capital expenditures, and the investor receives guaranteed interest and principal payments.

What is the difference between debenture and shares?

Debentures and shares are both used by a company to raise capital funds from the market. A debenture is a debt tool – the funds raised are considered loans to the company. But shares allow you ownership in the company.

What are the types of debentures?

The major types of debentures are:

• Registered Debentures: Registered debentures are registered with the company.
• Bearer Debentures:
• Secured Debentures:
• Unsecured Debentures:
• Redeemable Debentures:
• Non-redeemable Debentures:
• Convertible Debentures:
• Non-convertible Debentures:

Which debenture holders are not registered?

Bearer debentures are unregistered debentures that can be transferred by mere delivery. No records are maintained in the company’s debenture-holders’ register for the ownership of these securities. Such debentures are issued physically, i.e., on paper.