Differences between shares and debentures

• Shareholders are effectively owners; debenture-holders are creditors.
• Shareholders may vote at AGMs and be elected as directors; debenture-holders may not vote at AGMs or be elected as directors.
• Shareholders receive profit in the form of dividends; debenture-holders receive a fixed rate of interest.
• If there is no profit, the shareholder does not receive a dividend; interest is paid to debenture-holders regardless of whether or not a profit has been made.
• In case of dissolution of firms debenture holders are paid first as compared to shareholder.