Differences between shares and debentures

Basis of Diffeerence	Shares	Debentures
Ownership	By purchasing share shareholders become the owners of the company.	By purchasing debenture they only become the creditors of the company not owners.
Priority	Shareholders receive dividend and return of capital only after debenture holders receive.	In return of capital and payment of interest first priority is given to the debenture holders.
Certainty of return	The return from investment made on share capital is uncertain. Shareholders only receive dividend when the company run in profit.	In debenture, the interest rate on debentures are pre specified and interest income is certain.
Repayment	The investment made on share capital do not return until the company are not liquidated.	The investment made on debenture is return on the maturity period specified in the contract.
Convertibility	Share cannot be converted into debenture.	Debenture can be converted into share.
Control	Shareholders are real owners of the company and they can take part in the company’s operation and management so they can control the company.	Debenture holders do not have right to take part in company’s operation and management. So they cannot control the company.