concept of debenture

1. Objective
To Learn
1. Conceptof debenture
Difference between share
and debenture
On the Basis of Capital
On the Basis of Right
On the Basis of Profit
On the Basis of Claim
On the Basis of Charge
On the Basis of Dividend
On the Basis of Member
On the Basis of Ratio of
Interest
Definition:
A documentwhich either creates a debt or
acknowledgeit
--Definition:
It is a share received by a shareholder of the
company assets legally available for dividend
and divided among the member.
Is the distribution of profit among the share
holder in proportion to their invested money
/share .
--Special features :
Must be announced in general meeting
Must be paid out of profit
(there is no profit there is no dividend )
Must be recommended by director
Must be sanctioned by shareholder
The ration is upon the earning capacity
Once declared must be paid
Interim dividend may be given
May be paid to in reserve fund
It must be beyond what is already announced
Company cannot be compelled to announced
if no contrary intention is there
--Creation of reserved funds :
The company can reserve some fund out of
profit before declared the dividend .
--Right to receive :
The registered holder of a share
To his order
To his banker
--Date of dividend:
In general meeting in which declared and
announced
On the date it become a debt on company
--Penalty:
If not paid the chief executive will be punished
Exception:
if stop by operation of law
Death, Insolvency, Doubtful right, Stay by anyone
If the shareholder did not comply with direction
If any sum is due against the holder and the
dividend is applied accordingly
--Dividend to be paid in cash:
--Transfer of share with dividend:
Transfer is called “Cum Dividend “
--Transfer of share without dividend:
Transfer is called “Ex Dividend “
If there is no agreement the buyer is entitled
Subject: Company Law
Standard: LL.B second year
Topic: debenture, interest and dividend
MUNIR HUSSAIN KTK
Lecturer
UNIVERSITY LAW COLLEGE
QUETTA
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Fixed
interest