Debenture
When the capital of the company is not sufficient to meet the needs of business of the company, it can raise loan by the issue of what is known as debenture. So debenture represents the loan of the company. Debentures are usually issued in bonds by a company and are offered by means of prospectus.
Characteristics:
1) Numbered
2) Contains terms and conditions
3) Create floating charges or fixed charges
4) Appointment of receiver
5) Issue with trust deed
2) Issue of debentures: Debenture is an instrument acknowledging a debt by the company which can
also be offered for sale in the open market. The amount borrowed from the public by the sale of debentures is refundable with interest over a period of time. Debentures are issued usually in bonds by a company and are offered by means of prospectus.