What is an Debenture

Answer Posted / pravin kamble

Debenture is the Liability of the company, to increase the
fund flow of the company, companies collect direct money
from the market either by selling shares or by selling
debentures. But debentures are more secure than shares,
share holders are owner of the company, but debenture
holders are trusty for the company.

So at the time of insolvancy, by low company gives
preferance to their trusties, because company had taken a
loan from them, so they are more secure than the share
holders.

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