Issue of debentures

By issuing debentures means issue of a certificate by the company under

its seal which is an acknowledgment of debt taken by the company.

The procedure of issue of debentures by a company is similar to that of the

issue of shares. A Prospectus is issued, applications are invited, and letters

of allotment are issued. On rejection of applications, application money is

refunded. In case of partial allotment, excess application money may be

adjusted towards subsequent calls.

Issue of Debenture takes various forms which are as under :

1. Debentures issued for cash

2. Debentures issued for consideration other than cash

3. Debentures issued as collateral security.

Further, debentures may be issued

(i) at par, (ii) at premium, and (iii) at discount

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