In case of a liquidation of a public limited liability company; those that are first paid are?

A. ordinary shareholders
B. preference shareholders
C. cumulative preference shareholders
D. debenture holders

Correct Answer:

Option D – debenture holders

Explanation

Debenture-holders are the subscribers to debentures. Debentures are part of loan. A shareholder or member is the joint owner of a company; but a debenture holder is only a creditor of the company. In the event of liquidation, they are paid first before any other class of lenders.