What is the main difference between ordinary shares and debenture converted shares?

1. The holder of shares is known as shareholder while the holder of debentures is known as debenture holder.
2. Share is the capital of the company but Debenture is the debt of the company.
3. The shares represent ownership of the shareholders in the company. On the other hand, debentures represent indebtedness of the company.
4. The income earned on shares is dividend, but the income earned on debentures is interest.
5. In the event of winding up debentures get priority of repayment over shares.
6. Shares cannot be converted as opposed to debentures are convertible.
7. There is no security charge created for payment of shares. Conversely, security charge is created for the payment of debentures.
8. Trust deed is not executed in case of shares whereas trust deed is executed when the debentures are issued to public.
9. Unlike debenture holders, shareholders have voting rights.
10. Shares are issued at discount subject to some legal compliance. Debentures can be issued at discount without any legal compliance

Shares are small peace of total capital ,documented and has a face value offered for public subscription.general public who directly subscribe shares from primary or secondary market  are called ordinary shares ,and shares which can be converted to debentures are known as  debenture converted shares which will result in debt capital of the company

Shares can not be converted to debentures while debentures can be converted to shares. Further, on shares a shareholder is entitled of dividend while on debentures the debenture holder is entitled of interest.

March 26, 2015 By Surbhi S 8 Comments

Investment in shares and debentures has now taken a drastic position in the society. People of every age, gender, religion, etc whether they are youngsters or elders, men or women, Hindu or Muslim invest in various investments with the aim of earning more and more money. Novice investors might not understand about these terms, So here we have an article not only for beginners and existing investors, but for all the people who have any doubts in understanding the two. Let’s start the knowing difference between Shares and Debentures

Ordinary Shares is the Shares that owned by the Company while Debenture converted shares are the borrowed funds of the company. The ordinary shares called as the owners while debenture converted shares are the creditors.