Differences Between Shares And Debentures

Following are the main differences between shares and debentures:

1. Ownership

The share of a company provides ownership to the shareholders. Debenture-holders are creditors of a company who provide loan to the company.

2. Identity

Person holding share is known as shareholder. person holding debenture is known as debenture-holder.

3.Certainty Of Return

No certainty of return in case of loss for the shareholder. Debenture-holder receives the interest even if there is no profit.

4. Convertibility

Shares can not be converted into debentures. Debentures can be converted into shares.

5. Control

Shareholders have the right to participate and vote in company's meeting. Debenture holders do not possess any voting right and can not participate in meeting.