Non convertible debentures

Non convertible debentures or NCD are long term financial instruments used to raise long term funds by companies. These debentures cannot be converted into equities or shares i.e. non-convertible. In compensation for this drawback, the NCDs give higher rate of returns compared to their convertible counterparts. The Company Law Committee recommended that LLPs be allowed to issue NCDs to raise capital. This could benefit startups and small firms which require a lot of capital investment.