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Distinguish between share and debenture

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Distinguish between share and debenture

Posted by Ankit Gupta 6 years, 10 months ago

CBSE > Class 12 > Accountancy

1 answers

Yogita Ingle 6 years, 10 months ago

Share	Debentures
Share capital forms a part of the total capital of the company and shareholders are treated as owners of the company.	Debentures are defined as a debt of the company and debenture holders are creditors to the company.
The dividend rate on shares fully depends upon the profits that are obtained by the company.	The interest rate on debentures is fixed at the beginning of the issue of the debentures.
Shareholders are paid after the debenture holders are paid interest.	Debenture holders are paid the interest before the shareholders are paid.
Shareholders are paid dividend out of profits and if the company is in losses they don't get dividend.	Debenture holders are creditors and get interest compulsorily irrespective of the company makes a profit or not.

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