According to professor L.C.B Grower,
There are two classes of Company’s securities, first class is described as shares and second as debentures. Share and debenture holders both invest their money into the company and both get returns on their investment Key differences between shareholders and debenture holders which are as follows –
| 1.The shareholders have the right to control and interference in the company’s affairs. Like shareholder. | The debenture holders have no control in the company’s affairs. |
| 2.The shareholders are entitled to get dividends only out of profit. | The debenture holders are entitled to a fixed rate of interest, whether the company runs on profit or loss |
| 3.The shareholder cannot be paid up as long as the company is a going concern | Except in case of perpetual debenture holders, the company can pay back the debenture holders |
| 4.The shareholders are paid back only after all other claims have been paid | A debenture holder being a secured creditor, in winding up, is paid as a Priority |
- Salient features of the Companies Act 2013
- What is a Corporation, Corporation under the Constitution of India
- Difference between Brokers and Underwriters
- Distinction between shareholders and debenture holders
- Points of distinction between preference share and equity share
- Distinction between Company and Partnership