Distinguish between Shares and Debentures
|no||Points||SHARES (HOLDER)||DEBENTURES (HOLDER)|
|1||Meaning||A Companies owned capital which is spilt into large number of equal parts each such part is called as shares||
Debenture is an acknowledgement of debt. It is a source of borrowed capital.
|2||Return on investment||Monetary return on shares is called as dividend and it is paid at fluctuating rate.||Monetary return on debentures is called as interest and it is paid at a fixed rate.|
The Shareholders have voting rights through which they can participate in the management.
|The Debenture holders do not enjoy normal voting rights, except on those matters which affect their interest|
|4||Status of holders||The shareholders are the owners of the company.||Debenture holders are the Creditors of the company.|
|5||Redemption||Equity shares are not redeemed throughout 7 the life of the company.||Redeemable debentures are paid back after its maturity.|
|6||Priority claims||Shareholders do not have any priority while receiving return on investment or return of capital.||Debenture holders have prior claims for repayment of capital and for receiving interest on their investments.|
|7||Market Value||Market values of the shares keep changing as per the financial condition of the company.||Market value of the debentures remains constant.|
|8||Security offered||No security is offered for investing money in share capital.||Company can offer any asset as a security to debenture holders.|
Concept: Company Secretary - Conversion of Debentures into Shares
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