Business Studies, asked by lakshaychoudhary29, 4 months ago

Difference between shares and debentures

Answers

Answered by Ash6290

Answer:

Shares are the company-owned capital.

Debentures

Debentures are the borrowed capital of the company.

Holder

The person who holds the ownership of the shares is called as Shareholders

Debenture

The person who holds the ownership of the Debentures is called as Debenture holders.

Status

Owners. Creditors

Mode or return

Shareholders are given the dividends. Whereas, debenture holders are given interest.

Payment of return

Dividends can be paid to the shareholders out of profits earned by the company. Interest can be paid to the debenture holders, regardless of if the company has earned profits.

Voting rights

Shareholders possess voting rights. Debenture holders possess any right for voting.

Conversion

Shares cannot be converted into Debentures. However, debentures can easily be converted into Shares.

Trust Deed

Trust deed is not carried out in the shares. When the debentures are circulated to the public, a trust deed has to be carried out.

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