Question:
Debentures which do not have a specific charge on the assets of the company are known as:
Debentures which do not have a specific charge on the assets of the company are known as:
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Debentures with no specific charge on company assets are unsecured debentures.
Updated On: Oct 26, 2026
- Non-convertible debentures
- Irredeemable debentures
- Unsecured debentures
- Bearer debentures
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The Correct Option is C
Solution and Explanation
Step 1: Understand the basis of the question:
The question asks about security. Does the debenture have a specific charge on the assets of the company or not?
Step 2: Recall the types:
Secured (mortgage) debentures have a specific charge on assets.
Unsecured (naked) debentures have no such charge. The holders are only ordinary creditors.
Step 3: Pick the option:
No specific charge on assets means unsecured debentures, option (C).
Step 4: Why the other options are wrong:
(A) Non-convertible debentures cannot be changed into shares. This is about conversion, not security.
(B) Irredeemable debentures are not repaid during the life of the company. This is about repayment.
(D) Bearer debentures pass by delivery and no holder record is kept. This is about transfer.
Final Answer:
The answer is unsecured debentures, option (C).
The question asks about security. Does the debenture have a specific charge on the assets of the company or not?
Step 2: Recall the types:
Secured (mortgage) debentures have a specific charge on assets.
Unsecured (naked) debentures have no such charge. The holders are only ordinary creditors.
Step 3: Pick the option:
No specific charge on assets means unsecured debentures, option (C).
Step 4: Why the other options are wrong:
(A) Non-convertible debentures cannot be changed into shares. This is about conversion, not security.
(B) Irredeemable debentures are not repaid during the life of the company. This is about repayment.
(D) Bearer debentures pass by delivery and no holder record is kept. This is about transfer.
Final Answer:
The answer is unsecured debentures, option (C).
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