State to whether the following statements are True/False.

The acknowledgement of debt under common seal of company in termed as share.

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Solution

False

Explanation: The acknowledgement of debt under the common seal of a company is termed as debenture. Debentures carry a fixed rate of interest that is a charge against company profits. Debentures are paid back after the expiry of the specified term for which they were issued.

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A ‘share’ represents ownership of the company whereas a debenture is only acknowledgement of debt. State true or false.

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