1.

State five differences between shares and debentures.

Answer»

Debentures differ from shares in many respects. The main differences between the two are:

SharesDebentures
1. Shares are part of the capital of the company.1. But debentures are part of the loan capital or loan of the company.
2. Shareholders, being owners, have voting rights.2. Debenture holders, being only loan creditors, do not have voting rights.
3. Shareholders are entitled to dividend.3. Debenture holders are entitled to interest.
4. Shares are not secured by a charge on the assets of the company.4. Debentures are, generally, secured by a charge on the assets of the company.
5. Shares can be forfeited.5. Debentures are not forfeited.


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