Debentures Include Bond,Stock,Securities

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Debentures Include Bond,Stock,Securities


The Debentures is basically security which includes stock, bonds or any of the other kind of securities from any particular company. In short you can also say that debentures is a promising note, it is basically an instrument which shows the time and date for repayment of the capital or the interest. The charge for the company is calculated keeping in mind the assets of that particular company in order to protect the lender`s interest. If any thing goes wrong then the due amount can be claimed via debentures or directly.

The debentures are basically classified as follows:

On The Basis Of Security

Further more the debentures on the basis of security are classified as secured and mortgage debentures. In secured debentures there is not any place for the charge of the claims on the particular company. These types of debentures are mainly issued by the company with there good will and the past performance of the certain company. On the other hand in the mortgage debentures securities are replaced by the charges which are either the part or the whole of the company assets. In this type of debentures you need to first get registered your warrant which is then deposited with the lender in safe custody.

On The Basis Of Holding

On the basis of holdings the debentures are further classified into bearer debentures and the registered debentures. In the first kind of debenture namely bearer debenture, in this kind the debenture is payable to bearer and is transferable just by delivery. This kind of debenture never requires any kind of registration process while on the other hand as the name implies the  registered debenture the holders need to get registered in accordance with the company`s act.

On The Basis Of Redemption

On the basis of redemption the debentures are further classified as redeemable and irredeemable debentures. In the case of redeemable debenture, it can be redeemed after the expiry date in accordance with the company`s policy while the irredeemable debenture are issued for redemption in any specific event and it does not carry any expiry date with it.

On The Basis Of Conversion

On the basis of conversion the debenture is further classified into fully convertible and non-convertible debentures. In one hand convertible debentures can be converted into equivalent equity shares after the expiry date while the non-convertible debentures don’t carry any option of conversion and hence it cannot be converted into equity shares of the company after its expiry date.

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