Question

Debentures on which a company does not give any undertaking for the repayment of money borrowed are called :

• A. Bearer Debentures
• B. Secured Debentures
• C. Perpetual Debentures
• D. Registered Debentures

Hint:

Perpetual or Irredeemable debentures are characterized by the absence of a specified maturity date for repayment during the company's operational life.

Answer 1

The Correct Option is C

Step 1: Focus on the Repayment Condition:
The key feature described is the lack of an undertaking (promise) for repayment during the company's lifetime.
Step 2: Evaluate Options based on Repayment:
(A) Bearer Debentures: Have a repayment date, transferable by delivery.
(B) Secured Debentures: Have a repayment date, secured by assets.
(C) Perpetual Debentures: Also called Irredeemable Debentures. No fixed repayment date during the company's life; repayable usually only on winding up. This matches the description.
(D) Registered Debentures: Have a repayment date, holder's name is registered.
Conclusion:
Debentures with no repayment undertaking during the company's life are Perpetual Debentures.