Compare shares and debentures.
The major differences between shares and debentures are as follows −
Owned funds of the company.
Represents capital of the company.
Known as shareholders.
Will get dividends.
Deduction is not allowed.
No security for payments.
They have voting rights.
Can’t be converted to debentures.
No trust deed
Appropriation of profit.
Don’t lien on asset of the company.
Don’t have leverage benefits.
Disclosed in balance sheet as equity and liabilities column.
Borrowed fund of the company.
Represents debt of the company.
Known as debenture holders.
Deduction is allowed from profits.
Security for payment is there.
Can be converted into shares.
Charge against profit.
Trust deed is executed.
Have lien against assets of the company.
Have leverage benefit.
Not disclosed in balance sheet.
Published on 24-Jul-2020 10:43:54