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Definition of Debentures

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Debentures Definition :

Debenture is a certificate of a loan, loan bond or a written acknowledgement of indebtedness by the comapany setting out the terms and conditions of the loan

During debenture period a company may raise loan by issue a debenture or debenture stock.

A debenture holdes can be consider as a special creditor who is entitled to receive interest no matter whether company makes a profit or a loss.

Debentures are secured and are freely transferable by the debenture holder.

Debenture holder do not take part in management meeting as they do not have voting rights.