Sr.

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Basis

Shares

Debentures

1

Ownership Shareholders are the owner of the company. Debentures holders are creditors.

2

Part of capital Shares are a part of the capital of the company. Debenture constitutes a loan.

3

Voting right Shareholder generally enjoys the voting right. Debenture holders do not have voting right.

4

Charge Shaers do no carry any charge. Debentures have a charge on the assets of the company.

5

Interest or dividend Dividend can be paid to shareholders only out of the profits of the company. Interest on debenture is to be paid out even if there is no profit.

6

Rate of dividend On equity shares the dividend may vary from year to year. The rate of dividend is fixed in case of debentures.

7

Priority In the event of liquidation of the company the shareholders are payable at the last. Debentures get priority over the shares.
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