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LOAN CAPITAL - Coggle Diagram
LOAN CAPITAL
Debentures
Chitty J said in Levy v Abercorris Slate & Slab Co - “a debenture means a document which either creates a debt or acknowledges it, and any document which fulfills either of those conditions is a debenture”
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- A promise to repay the money borrowed
- There is no precise legal meaning attached to the word debenture.
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- -Company may borrow money by issue of debentures which are in reality promises to repay the sum borrowed
-Executed under the seal of the company.
- -Can be a document issued to such lende
-Is a self contained security entitling the holder to take action
But when the asset or property of the company is charged to the debenture holder, it is secured debenture.
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Introduction
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A trading company has an implied power to borrow money to an extent which is reasonable and necessary
This implied power extends to the power of the company to give security for the loan by creating charges over its assets.
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