Question
State the difference between Share and Debenture.
| No. | Points of difference | Share | Debenture |
| $1.$ | Definition | Company's capital is distributed in small equal parts and every part of this capital is called a 'Share'. | Borrowed money of the company is distributed in certain equal parts. Each part is known as debentures. It is a debt of the Company. |
| $2.$ | Returns | Dividend is paid on shares. | Interest is paid on debentures. |
| $3.$ | Time of Payment | Divided is paid at the end of the year after considering profit | The interest is paid at fixed rate regularly on debenture. |
| $4.$ | Ownership | Shareholders are owners of the company. | Debentures-holders are only creditors of the company. |
| $5.$ | Voting right | Shareholders are owners, so voting right is given. | Debenture-holders are creditors, so voting right is not given. |
| $6.$ | Uncertainty | The return on shares is uncertain. | The returns on debentures are fixed. |
| $7.$ | Charge on Assets | No charges are created on assets to issue shares. | Charges have to be created the company's assets to issue debentures. |
| $8.$ | Refund | Share Capital is generally permanent capital. It cannot be has to be refunded. | Capital collected by debentures has to be refunded after a fixed period. |
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