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Which of the following is not a characteristic of Bearer Debentures?
- a)They are treated as negotiable instruments
- b)Their transfer requires a deed of transfer
- c)They are transferable by mere delivery
- d)The interest on it is paid to the holder irrespective of identity
Correct answer is option 'B'. Can you explain this answer?
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Which of the following is not a characteristic of Bearer Debentures?a)...
Bearer Debentures:
Characteristics:
- They are treated as negotiable instruments: Bearer debentures are considered as negotiable instruments, which means they can be transferred to another party by mere delivery.
- Their transfer requires a deed of transfer: This statement is not true. Bearer debentures are transferable by mere delivery, meaning the transfer does not require a deed of transfer. The ownership of the debenture is transferred simply by physically handing over the debenture to another party.
- They are transferable by mere delivery: Bearer debentures can be transferred by mere delivery, as mentioned earlier. The transfer is complete once the debenture is physically handed over to the new holder.
- The interest on it is paid to the holder irrespective of identity: One of the key characteristics of bearer debentures is that the interest on them is paid to the holder irrespective of their identity. This means that as long as the holder possesses the debenture, they are entitled to receive the interest payments.
Therefore, the statement "Their transfer requires a deed of transfer" is not a characteristic of bearer debentures, making option 'B' the correct answer.
Characteristics:
- They are treated as negotiable instruments: Bearer debentures are considered as negotiable instruments, which means they can be transferred to another party by mere delivery.
- Their transfer requires a deed of transfer: This statement is not true. Bearer debentures are transferable by mere delivery, meaning the transfer does not require a deed of transfer. The ownership of the debenture is transferred simply by physically handing over the debenture to another party.
- They are transferable by mere delivery: Bearer debentures can be transferred by mere delivery, as mentioned earlier. The transfer is complete once the debenture is physically handed over to the new holder.
- The interest on it is paid to the holder irrespective of identity: One of the key characteristics of bearer debentures is that the interest on them is paid to the holder irrespective of their identity. This means that as long as the holder possesses the debenture, they are entitled to receive the interest payments.
Therefore, the statement "Their transfer requires a deed of transfer" is not a characteristic of bearer debentures, making option 'B' the correct answer.
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Which of the following is not a characteristic of Bearer Debentures?a)They are treated as negotiable instrumentsb)Their transfer requires a deed of transferc)They are transferable by mere deliveryd)The interest on it is paid to the holder irrespective of identityCorrect answer is option 'B'. Can you explain this answer?
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