Differences Between Shares and Debentures
- Shareholders are effectively owners; debenture-holders are creditors.
- Shareholders may vote at AGMs (Annual General Meetings) and be elected as directors; debenture-holders may not vote at AGMs or be elected as directors.
- Shareholders receive profit in the form of dividends; debenture-holders receive a fixed rate of interest.
- If there is no profit, the shareholder does not receive a dividend; interest is paid to debenture-holders regardless of whether or not a profit has been made.
- In case of dissolution of firms debenture holders are paid first as compared to shareholder.
Read more about this topic: Financial Capital
Famous quotes containing the words differences between, differences and/or shares:
“The extent to which a parent is able to see a child’s world through that child’s eyes depends very much on the parent’s ability to appreciate the differences between herself and her child and to respect those differences. Your own children need you to accept them for who they are, not who you would like them to be.”
—Lawrence Balter (20th century)
“The mother must teach her son how to respect and follow the rules. She must teach him how to compete successfully with the other boys. And she must teach him how to find a woman to take care of him and finish the job she began of training him how to live in a family. But no matter how good a job a woman does in teaching a boy how to be a man, he knows that she is not the real thing, and so he tends to exaggerate the differences between men and women that she embodies.”
—Frank Pittman (20th century)
“Whatever house you enter, first say, Peace to this house!’ And if anyone is there who shares in peace, your peace will rest on that person; but if not, it will return to you.”
—Bible: New Testament, Luke 10:5,6.