Difference between shares and debentures

by • 06/01/2013 • GeneralComments (0)384

Q.15 Explains the difference between shares and debentures?

Ans: DIFFERENCE BETWIEN SHARES AND DEBENTURES

 

SHARE

1. A shareholder is the owner of the company.

2. The shareholders manage the affairs of the company.

3. The shareholder faces profit and loss.

4. A shareholder cannot withdraw its capital.

5. A shareholder receives the reward in the shape of profit.

6. In Islam the shareholders maybe justified.

7. A shareholder may be responsible for company’s liability.

8. The right and power of the shareholder is written in the articles of association.

9. In case of dissolution of company shareholder has got secondary right

10. Shares are considered unsecured.

 

DEBENTURE

1. A debenture holder is the creator of the company.

2. The debenture holders cannot interfere in the management.

3. The debenture holder has no concern with the profit and loss. He receives fix rate of interest.

The amount of debenture is returnable after a specific period.

5. A debenture holder receives the reward in the shape of interest.

6. A debenture holder is not justified in Islam.

7. A debenture holder is not responsible for any liability of the company.

8. The rights and power of debenture holder is written on the certificate issued by the company.

9. While a debenture holder has got first right to receive his amount, from the company.

10. Debentures are considered secured security.

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