Question

Distinguish between shares and debentures on the basis of convertibility

Answer 1

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.

Answer 2

Debentures can be converted into shares after a certain period .such shares are called convertible debentures.
But, shares cannot be converted into debentures.