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Legal Definition and Related Resources of Debenture

Meaning of Debenture

Usually an obligation of corporations or large moneyed co-partnerships, issued in a form convenient to be bought and sold as investments. An acknowledgment of a debt in nature of a bond or bill; a writing acknowledging a debt; it may either create a debt or acknowledge same. An instrument under seal, creating a charge according to its wording on the assets specified therein of the debtor and to that extent, conferring upon the grantee a priority over other subsequent creditors or existing creditors not possessed of such a charge. May also be in the nature of mortgage , to secure a certain sum of money with interest to which coupons are attached, making interest payable at periodic intervals such as halfyearly. However, it differs from a mortgage in that it does not confer legal title or any ordinary right of ownership and at best is only an equitable mortgage conferring only equitable rights . See United Masonic Temple Corp. v Harris, 242 III. App. 296. Also see Lorimer v McGreevv, 84 S. W.2d667, 229 Mo. App. 970.

Debenture Alternative Definition

(Lat. debentur, they [moneys] are due). The word with which certain obsolete bonds given by the exchequer began. Blount. In English Law. An instrument issued by a company or public body as security for a loan of money. It contains, either expressly or impliedly, a promise to pay the amount mentioned in it, and almost invariably creates a charge on the whole or part of the property of the company or public body. A debenture generally forms part of a series or issue of similar instruments, with a provision that they shall all rank pari passu in proportion to their amounts. As to debentures generally, see Cav. § 267 et seq. In American Law. A custom-house certificate given by the collector of the port to the exporter or importer of goods, entitling him, under certain circumstances, to a drawback of duties paid on exported or imported goods. See Drawback. In corporation law the term is applied to obligations of corporations, in some instances where secured by specific assets, in others, where not so secured. Fletcher Cyc. Corp. § 963.

Legal Definition of Debenture

A promissory note backed by the general credit of a company and usually not secured by a mortgage or lien on any specific property. (See: Bond)

Related Entries of Debenture in the Encyclopedia of Law Project

Browse or run a search for Debenture in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.

Debenture in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Debenture in Historical Law in the Encyclopedia of Law.

Legal Abbreviations and Acronyms

Search for legal acronyms and/or abbreviations containing Debenture in the Legal Abbreviations and Acronyms Dictionary.

Related Legal Terms

You might be also interested in these legal terms:

Mentioned in these terms

Floating Charge, Security.


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Related topics Debenture in the World Encyclopedia of Law


This definition of Debenture is based on the The Cyclopedic Law Dictionary . This entry needs to be proofread.

Vocabularies (Semantic Web Information)

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English Legal System: Debenture

In the context of the English law, A Dictionary of Law provides the following legal concept of Debenture :

A document that acknowledges and contains the terms of a loan (usually to a company). The loan may be unsecured (a naked debenture). More usually, however, the debenture will be subject to a *charge and will contain the terms of the charge (e.g. the right to appoint a *receiver or a *crystallization event). Debentures may be issued to a single creditor or in a series to several creditors in order to raise finance for a company. In the case of the latter, a trust may be created and contained within the debenture in favour of such creditors. This enables the company to appoint a trustee for debenture holders to ensure that the financial activities of the company are managed in the interests of the group of creditors. Finance raised by the issue of debentures is known as *loan capital. This is contrasted with share *capital, the holders of which are *company members.

Debenture Definition (in the Accounting Vocabulary)

The New York State Society of Certified Public Accountants offers the following definition of Debenture in a way that is easy for anybody to understand: General DEBT obligation backed only by the integrity of the borrower and documented by an agreement called and INDENTURE.

Concept of Debenture in the context of Real Property

A short definition of Debenture: Unsecured indebtedness, usually long-term. Most common debentures are in the form of bonds.

Concept of Debenture in the context of Real Property

A short definition of Debenture: Unsecured indebtedness, usually long-term. Most common debentures are in the form of bonds.


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