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Question

Debenture holders are the ______ of the company.

A
Creditors
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B
Owners
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C
Quasi owner
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D
Deemed owner
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Solution

The correct option is C Creditors
Debenture-holders are the subscribers to debentures. Debentures are part of loan, so a debenture holder is only a creditor of the company. Debenture holders have no rights to vote in the company's general meetings of shareholders, but they may have separate meetings or votes e.g. on changes to the rights attached to the debentures.

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