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Types of Issue of Debentures

From the point of view of consideration, the debentures are issued as follows:

(1) For Cash The company issues debentures for the purpose of receiving lump sum amount or for the purpose of receiving the amount by way of installments / solicitations. Debentures are issued at par, premium or deduction.

(2) For Consideration other than Cash, the company may pay the purchase consideration of any asset in debentures or the purchase consideration of any business by issue of debentures. In this case also the debentures are issued at par, premium or deduction.

(3) As Collateral Security The company issues debentures in the form of subsidiary (secondary) security of its lender bank and financial institution. In this situation, if the lender does not get the payment of the entire loan from the original security, then the lender becomes the debenture holder of the company for the remaining loan. If the company repays the loan and interest on time, the lender returns these debentures.

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