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Question
___________ is created to provide funds for redemption of debentures.
___________ is created to provide funds for redemption of debentures.
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Solution
The correct option is C Debenture Redemption Reserve
According to the amendments in Indian Companies Act, 1956 in 2000, it is stated that Indian corporation who issue debentures must maintain a reserve to protect the investors against possible default by the company. This reserve is known as debenture redemption reserve. It states that an adequate amount must be transferred from profits every year to this reserve until issued debentures are redeemed.
According to the amendments in Indian Companies Act, 1956 in 2000, it is stated that Indian corporation who issue debentures must maintain a reserve to protect the investors against possible default by the company. This reserve is known as debenture redemption reserve. It states that an adequate amount must be transferred from profits every year to this reserve until issued debentures are redeemed.
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