Which security normally represents a loan made to a company rather than ownership in it?
Correct answer: C. Debenture
- A. Ordinary share
- B. Preference share
- C. Debenture
- D. Bonus share
Explanation
A debenture generally evidences debt owed by the company to its holder. Shares represent ownership interests, although preference shares may carry special rights over dividends or capital.
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About Company Law Basics
Company law covers incorporation, separate legal personality, limited liability, shares, the memorandum and articles of association, and the powers and duties of directors. It also includes shareholder meetings, resolutions, company records, audit, winding up and the differences between a registered company, partnership and sole proprietorship.
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