Debenture| Legal Education

                     The public company issues share and debenture for raising capital. A share holder becomes the member of company while debenture holder is not a member of company debenture is a contract of debenture.  Debenture includes debentures stock, bounds, finance, certificate and any other securities other than a share of company weather constituting a charge of the assets of company or not. “Any instrument under the seal of company evidencing a debenture” Debenture can be classified into different kinds under different heads.  (i)- Kind regarding transferability  (ii)- Kind regarding security (iii)- Kind regarding redeamability (iv)- Kinds regarding conversion

                    Registered debenture is those which can be transferable by fulfilling the condition of registration. Bearer debenture is such which can be transfer without any condition. Regarding security debenture can be classified into following two kinds.  Secured debenture is those where some security has been contained for debenture. Un-secure debenture is those where company has not been created any security.Following are two kinds of debenture with reference to redeamability of debentures. Where the company says that company shall take back debentures at any time. Such debentures are called redeemable debentures. A debenture which shall remain forever with a person is called perpetual debenture. 

 Following are two kinds regarding conversion Those defenses which can be converted into shares are called convertible debenture.  Those which can’t be converted into shares are called non-convertible debenture. It is the power of a company to issue debentures by following the procedure provided by company ordinance. Following is the procedure of issuance of debenture. For issuance of debenture first a meeting shall be hold a   board of directors shall be held.  A general meeting shall be held and notice for that general meeting shall be given to all the members of company. A resolution shall be passed with simple majority for issuance debenture. After the resolution is passed debenture shall be issued finally.     

                

            (i)- Name of company (ii)- Serial number (iii)- Name of debenture holder (iv)- Principle amount payable (v)- Tare of interest (vi)- Date of issuance Following are the remedies available to debenture holder  It is a remedy who is agreed to file a civil suit. Debenture holders can sale assets for the recovery of money. The court can appoint a reserve to recover for a debenture holder who is aggrieved. A debenture holder can file a petition for winding up of company as remedy available to him. Debenture holder can file even a suite file recovery of arrears. Debenture money is not paid.