Types of Debentures are:
1. Redeemable Debentures –
The debentures which are to be redeemed within a specific period as per the terms of their issue.
2. Irredeemable Debentures –
These debentures are not redeemed at a specific period. Their redemption is not certain. Such debenture holders can’t ask for a refund of capital except for the case when the company makes any default in payment of interest on these debentures otherwise these are paid only in case of winding up of the company.
3. Convertible Debentures –
The debentures which get converted into equity shares on expiry of a specified period.
4. Non – convertible Debentures –
The debentures which do not carry the option of conversion into equity shares and are therefore known as non – convertible debentures. These are redeemed on the expiry of the specified period.
5. Secured Debentures –
Debentures which are secured by a charge on the immovable property of the company.
6. Unsecured Debentures –
Debentures which are issued without creating a charge on assets are known as Unsecured Debentures.
7. Registered Debentures –
Those debentures in which the name of debenture holder is registered or recorded.
8. Bearer Debentures –
These debentures are transferrable by mere delivery. The name of the holder is not registered with the company.
9. Zero Percent Interest Debentures –
The debentures which do not carry any interest payable. Such debentures are issued at discount and redeemed at par.
