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Key differences between shareholders and debentures holders

Differences between shareholders and debentures holders

  1. As soon as you buy shares in company you become partial owner in that company,whereas debenture holder is creditor of company.
  2. Shareholders earn their dividend only when company earns profit, whereas interest on debentures must be paid, didn’t matter company is making profit or not.
  3. Investment in shares is like unsecured investment whereas debenture are generally secured through assets of company.
  4. Shareholders are authorized to take part in general meeting of company whereas debenture holder have no right to attend, unless any decision affection their interest is taken.
  5. Through election of board of directors shareholders control affairs of the company. Debenture holders not concern about management and control of the company.
  6. During winding up of a company debenture holders have better claim over shareholders. Debenture holder must be paid before shareholders.
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