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C H A P T E R

Joint Stock Company—

Issue of Debentures

MEANING OF KEY TERMS USED IN THE CHAPTER

1. Debenture
It is a written acknowledgement of Debt issued by the company. ‘Debenture’ includes debenture
stock, bonds or any other instrument of a company, evidencing a debt, whether constituting a
charge on the assets of the company or not.

2. Debentureholder
The person who owns the debentures.

3. Issue of Debentures for Cash
It means issue of debentures against consideration being received through bank.

4. Issue of Debentures for Consideration other than Cash
It means issue of debentures against which amount is not received as consideration but is received
in kind, i.e., assets or services.
5. Issue of Debentures as Collateral Security
It means issue of debentures to secure a loan.

6. Issue of Debentures at Par
It means that debentures are issued at its nominal (face) value of debentures.

7. Issue of Debentures at Premium
It means that the issue price of the debentures is higher than their nominal (face) value.

8. Issue of Debentures at Discount
It means that the issue price of the debentures is lower than their nominal (face) value.

9. Redemption of Debentures at Par
It means that the redemption value and the nominal (face) value of debenture is same.

10. Redemption of Debentures at Premium
It means that the redemption value of the debenture is higher than its nominal (face) value.