The long term finance is required for the development programs such as an expansion of the level of production, modernization of production methods, etc. The long term finance is raised by Joint Stock Companies through the issue of Shares and Debentures. Issue of shares and debentures play an important role in long term credit.

Issue of Shares: The capital of a joint stock company is divided into a small unit called shares. To start a joint stock company, the promoters issue shares. Also whenever they need additional capital for a long term purpose, the companies raise the funds through the issues of shares to the public.

Debentures: The joint stock companies are empowered to borrow finance for meeting long term financial requirements through the issues of debentures. Debentures are the debts or loans borrowed by the companies. A company under its common seal acknowledges a debt to some persons containing an undertaking to repay the debt after a specified period. A fixed rate of interest is paid to the debenture holders at regular intervals.