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Issue & Redemption of Debentures - Practical Problems Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Issue & Redemption of Debentures - Practical Problems Video Lecture - Advanced Corporate Accounting - B Com

1. What is the process of issuing debentures?
Ans. Debentures can be issued by a company through the following process: drafting a prospectus, obtaining the consent of the existing shareholders, filing necessary documents with the Registrar of Companies, and receiving the approval of the Board of Directors.
2. How are debentures redeemed by a company?
Ans. Debentures can be redeemed by a company by either paying off the principal amount on the maturity date or through a redemption fund created by the company for this purpose.
3. Can debentures be converted into equity shares?
Ans. Yes, debentures can be converted into equity shares based on the terms and conditions specified at the time of issuance. This conversion is usually at a predetermined ratio and within a specified time frame.
4. What is the difference between secured and unsecured debentures?
Ans. Secured debentures are backed by assets of the company, which act as collateral in case of default, while unsecured debentures are not backed by any specific assets and rely solely on the creditworthiness of the company.
5. How are debentureholders protected in case of bankruptcy of a company?
Ans. In case of bankruptcy, debentureholders have a higher claim on the company's assets compared to equity shareholders. They are entitled to receive their dues before equity shareholders in the distribution of assets.
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