Companies and LLPs borrowing on a long-term basis will generally do so against the issue of a debenture acknowledging the debt and specifying the terms under which the loan is made. Most debentures will also create charges over the assets of the company. The term ‘debenture’ is not precisely defined. It is not limited to loans secured on the assets of the company, except for quoted securities, where otherwise the term ‘unsecured loan stock’ is always used. A debenture is defined in s.738 as including ‘debenture stock, bonds and any other securities of a company, whether or not constituting a charge on the assets of the company’. A debenture can also be defined as: a written acknowledgement of indebtedness, usually by deed and usually secured by a charge on the assets of the company. It can exist in the form of a single debenture or one of a series ranking pari passu (on equal footing). It includes debenture stock.
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- Registered companies: loan capital
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- Chapter 12