Hello students, today we are going to learn a very short, simple but yes interesting chapter called issue of debenture, so let’s begin with the provision related to the issue of denture but what is debenture, so let’s begin with the meaning of debenture. Debenture is derive from the Latin word called Debere which means to owe something to someone, kisi ko koi chiz udhar mein dena, agar aur simplifiy kare isko, debenture kuch nhi yeh company ko diya hua ek karza hai ok this sentence is really important do not forget the word debenture is drive from the Latin word debere which means to owe something to someone. Debenture is an acknowledgment, what is acknowledgment, it’s a proof, its an evidence of loan ok, so debenture is a proof of loan of that issued by company under its common seal, common seal is the signature of the company, it also means that debenture is a proof of loan taken by the company on certain terms and conditions, agar company ne loan liya hai , uddhar liya hai, karza liya hai toh definitely it should be under certain rules toh usse humne kaha hai company takes the loan it’s a proof of loan on certain terms and condition. Let’s begin with the definition of debenture, according to the oxford dictionary debenture is certificate issued by company acknowledging proof donot forget, acknowledging proof that it is a borrowed money on which interest has been paid, agar isse bole humlog yeh company ne liya hua hai karza, agar hum company ko loan derhe hai, karza derhe hai toh definitely hume return mein humlogo ko kya milega interest ok, so definition says according to the oxford dictionary debenture is certificate issued by company acknowledging it’s a proof that it is a borrowed money on which interest is been paid. So let’s begin with the statutory provision related to issue of debenture, where if first point says company can issue debentures to raise loan capital why we call it as a loan capital, ye company ko diya hua karza hai, loan karza ok so we say it’s a loan capital not only that debenture it’s a most suitable and a safe method of raising borrow capital kyu ki ye paisa humne udder mein diya hua hai so we call it as a borrowed capital. A person purchasing a debenture we are also called them a debenture holder of the company not only debenture holder but we also called them as a creditors of the company, they are not the owner they are the creditors of the company because we have taken the borrowed money ok so unhone paise dale huye hai ye borrowed capital hai that’s the reason we called them as a creditors of the company yes ya entitled to get at the fixed rate inko kya return mein milega interest that to fixed rate of interest unko milega, debenture may be issued at par, at premium or at discount, yes company can issue debenture at par for example agar face value of debenture is at 10 rupees yehi 10 rupee ka debenture agar humlogo ne 10 rupees mein hi issue kiya toh its at par but yehi 10 rupees ka debenture manke chalo ye 11 ya 12 rupees mein humne issue kiya matlab we are charging high from them right so we called It as a premium and 10 rupees ka denture agar 9 rupees mein offer ker rahe hai humlogo ko they charging less from yours then it’s a discount, so debenture may be issued at par, at premium or at discount. Debenture can be issued by both public as well as by private limited company, students let me take you back to your eleventh standard, you have studied the stages in the formation of company, they where four stage, promotion stage, incorporation stage, capital subscription stage and fourth one is the certificate to commence a business, now understand one thing if it’s a public limited company, if it’s a public limited company debenture can be issued after fourth stage after getting a certificate of commencement but if it’s a private limited company the company donot have to wait till the fourth stage, after second stage, after getting a incorporation certificate private limited company can issue debenture matlab debenture ye dono public limited as well as private limited company issue ker sakti hai but agar ye public limited hai toh fouth stage ke baad after getting a certificate of commencement ye company debenture issue kar sakti hai and agar ye private limited hai then after second stage issue ker sakti hai, incorporation stage ke baad ye company debenture issue ker sakti hai . Who has the power to issue debenture yes board of directors has the power to issue debentures under section 292 sub section 1 such rights can excise by passing resolution in the board meeting, resolution is a final decision can be taken in the board meeting.