The correct answer is: C. Debentures
A debenture is a long-term debt instrument issued by a company. It is a loan that the company borrows from investors, and the investors are repaid with interest over time. Debentures are typically secured by the company’s assets, which means that if the company defaults on the loan, the investors can seize the assets to repay themselves.
A partnership firm is a business owned by two or more people. The partners are jointly and severally liable for the debts of the firm, which means that each partner is personally liable for all of the firm’s debts, even if they were not personally involved in incurring the debt.
Partnership firms
cannot raise funds through debentures because debentures are a form of secured debt, and partnership firms are not allowed to secure their debts. This is because the partners are personally liable for the debts of the firm, and if the firm defaults on a debt, the creditors could seize the assets of the partners to repay themselves.Here is a brief explanation of each option:
- A. Bank loan – A bank loan is a loan that a bank makes to a business. The loan is secured by the business’s assets, and the business is required to repay the loan with interest over time. Partnership firms can raise funds through bank loans.
- B. Partners loan – A partners loan is a loan that a partner makes to a partnership firm. The loan is not secured by the partnership firm’s assets, and the partner is not required to repay the loan with interest. Partnership firms can raise funds through partners loans.
- D. Partners capital – Partners capital is the money that the partners contribute to the partnership firm. The partners are not required to repay the partners capital, and the partners are not required to pay interest on the partners capital. Partnership firms can raise funds through partners capital.