Difference between share and debenture

The key difference between a share and a debenture is that while share represents part of ownership of a company,  debenture acknowledges loan or debt to the company. Thus, a shareholder is a participant in the profits as well as losses of the company but a debenture holder is paid interest over the  life time of the debenture and principal amount at the end of life.  The following table further documents the difference between shares and debentures.

Share capital is an ownership capital.Debentures capital is credit to the company.
A shareholder is the owner of the company.A debenture holder is the creditor of the company
Share capital is not returnable in the life time of the company. However, the redeemable preference shares are refunded during the life-time of the company.Debenture capital returnable during the lifetime of the company. The exception is the irredeemable debentures which are not redeemable during the life-time of the company.
Equity Shareholders enjoy the voting rights.Debentures holders do not have the voting rights.
Dividend is payable on shares & it is an appropriation of profitsInterest on debentures is payable at a fixed rate on specified date irrespective of profits of the company.
Dividend depends on the profit of the companyInterest is paid on debentures & it is a charge on the revenue of the company.
Shares are unsecured.Debentures are generally secured.
In the event of winding up of the company shareholders are the last person in re-fund of their capital.Debenture holder being the creditors are paid prior to the shareholders. If secured they have priority even over the unsecured creditors.

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