TUTORIAL TOPIC 6

STRUCTURE QUESTION

1. Explain what is debentures and FIVE (5) features of a debenture holder (10 marks)

2. Distinguish between a fixed charge and a floating charge (10 marks)

3. Briefly discuss the process of crystallization of a floating charge (5 marks)

ESSAY QUESTION

1. Kami Baru Sdn Bhd is a new company which was incorporated in May 2021. They plan to
apply for loan from Maybank in order to raise capital for their company. The bank agrees to
give them loan facility provided that they put up any of the company’s asset as a charge for
the loan. Directors of Kami Baru Sdn Bhd approached you and seek your advice on the type
of assets that can be charged and the differences between fixed charge and floating charge.
Advise the directors of Kami Baru Sdn. Bhd. (15
marks)

2. Taylor Swift was offered with debenture issued by Syarikat Village People Sdn Bhd. On the
debenture certificate which was sold for RM5,000 per certificate, it was stated that she will
be paid interest of 10% per annum for a period of 10 years and at the end of the 10-year
period her principal will be returned to her. She asks you regarding her rights as a debenture
holder under the law. Meanwhile, Taylor Swift’s friend, Christina Aguilera is a shareholder
in the company and Christina told her that as a shareholder she has more rights in the
company compared to Taylor. She asks whether this is true.

Advise Taylor on her rights as a debenture holder and the differences between a debenture
holder and a shareholder (20 marks)