From the point of view of Tenure, debentures can be of following type…

From the point of view of Tenure, debentures can be of following types:

(A) Reedemable Debentures

(B) Non-Convertible Debentures

(D) Registered Debentures

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A) and (C) only

Debentures are grouped by several points of view. From the point of view of tenure (how long the money is borrowed for) they are either redeemable or perpetual.

(A) Redeemable Debentures — a type by tenure: they are repaid on the expiry of a fixed period.
(B) Non-Convertible Debentures — not a type by tenure; this is a type from the point of view of convertibility (whether they can be turned into shares).
(C) Perpetual Debentures — a type by tenure: there is no undertaking to repay them except on winding up or after a very long period.
(D) Registered Debentures — not a type by tenure; this is a type from the point of view of registration (whether the holders’ names are kept in a register).

NCERT (2026-27 edition):
From the Point of view of Tenure – “Redeemable Debentures: Redeemable debentures are those which are payable on the expiry of the specific period either in lump sum or in Instalments during the life time of the company. Debentures can be redeemed either at par or at premium. Irredeemable Debentures: Irredeemable debentures are also known as Perpetual Debentures because the company does not give any undertaking for the repayment of money borrowed by issuing such debentures. These debentures are repayable on the winding-up of a company or on the expiry of a long period.”

NCERT (2026-27 edition):
From the Point of view of Convertibility – “… Non-Convertible Debentures: The debentures which cannot be converted into shares or in any other securities are called non-convertible debentures. Most debentures issued by companies fall in this category.”

NCERT (2026-27 edition):
From the view Point of Registration – “Registered Debentures: Registered debentures are those debentures in respect of which all details including names, addresses and particulars of holding of the debentureholders are entered in a register kept by the company. Such debentures can be transferred only by executing a regular transfer deed.”