Question:
The debentures which can be transferred by the way of delivery and the company does not keep any record of the debentures holders are called ___________ debentures.
The debentures which can be transferred by the way of delivery and the company does not keep any record of the debentures holders are called ___________ debentures.
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Debentures that pass by simple delivery, with no record of holders, are bearer debentures.
Updated On: Oct 26, 2026
- Secured
- Redeemable
- Bearer
- Unsecured
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The Correct Option is C
Solution and Explanation
Step 1: Read the clues:
Clue 1: the debentures can be transferred just by handing them over (delivery).
Clue 2: the company keeps no record of the holders.
Step 2: Recall the types:
Bearer debentures are payable to whoever holds (bears) the certificate. No register of holders is kept.
Registered debentures are the opposite: the names of holders are recorded and transfer needs a deed.
Step 3: Choose the answer:
Both clues point to bearer debentures, option (C).
Step 4: Why the other options are wrong:
(A) Secured debentures have a charge on the assets of the company. This says nothing about transfer.
(B) Redeemable debentures are repaid after a fixed period. This is about repayment, not transfer.
(D) Unsecured debentures have no charge on assets. This is about security, not transfer.
Final Answer:
The debentures are called bearer debentures, option (C).
Clue 1: the debentures can be transferred just by handing them over (delivery).
Clue 2: the company keeps no record of the holders.
Step 2: Recall the types:
Bearer debentures are payable to whoever holds (bears) the certificate. No register of holders is kept.
Registered debentures are the opposite: the names of holders are recorded and transfer needs a deed.
Step 3: Choose the answer:
Both clues point to bearer debentures, option (C).
Step 4: Why the other options are wrong:
(A) Secured debentures have a charge on the assets of the company. This says nothing about transfer.
(B) Redeemable debentures are repaid after a fixed period. This is about repayment, not transfer.
(D) Unsecured debentures have no charge on assets. This is about security, not transfer.
Final Answer:
The debentures are called bearer debentures, option (C).
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