Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

What is the maximum limit of interest that a company can offer on debentures as per Companies Act 2013?

Options:

5%

10%

15%

No maximum Limit is prescribed

Correct Answer:

No maximum Limit is prescribed

Explanation:

The correct answer is option 4- No maximum Limit is prescribed.

Debenture is debt to the Company. It's like a loan that needs to be repaid over a certain period of time. Debentures carry fixed interest rate. As per the Companies Act, 2013, there is no maximum limit prescribed for the interest that a company can offer on debentures.