Debentures are a debt instrument used by companies and government to issue the loan. The loan is issued to corporates based on their reputation at a fixed rate of interest. Registered debentures are recorded in the company’s debenture-holders’ register with the full details of every debenture holder. Registered Debentures means any securities of the Company containing terms identical to the Debentures (except that such securities (i) will be registered under the Securities Act and (ii) will not contain terms with respect to transfer restrictions) that are issued and exchanged for the Debentures pursuant to the Registration Rights Agreement. These are debentures that are payable to the registered holders i.e., persons whose names appear in the Register of Debenture holders.
A registered debenture is recorded in the register of debenture holders of the company. A regular instrument of transfer is required for their transfer.
Registered debentures are not negotiable. These debentures are not transferable by mere delivery. Such debentures are transferable in the same way as shares. These cannot be transferred to another person unless the regular instrument of transfer is sanctioned by the directors of the company. These are not transferable by mere delivery. The names of the holders of these debentures with details of the number, value, and type of debenture held are recorded in the register of debenture holders. The name of the purchaser is entered in the register. The coupons for interest are sent only to the persons in whose names the debentures are registered.
The names and addresses of registered debentures holders are recorded in the registered of the company. These debentures are such debentures within which all details comprising addresses, names, and particulars of holding of the debenture holders are filed in a register kept by the enterprise. Transfer and transmission of these must be registered in the books of the company, as in the case of shares. Such debentures can be moved only by performing a normal transfer deed. Interest is paid to the registered holders in the same manner as the distribution of dividends. Transfer of such debentures requires registration. Every transfer of debenture requires the same transfer procedure to be repeated.