{"id":4454,"date":"2021-08-11T15:37:54","date_gmt":"2021-08-11T10:07:54","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=4454"},"modified":"2025-10-07T19:02:27","modified_gmt":"2025-10-07T13:32:27","slug":"difference-between-debenture-and-share","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/","title":{"rendered":"Difference Between Debenture and Share (Companies Act 2013)"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69eded00e5533\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69eded00e5533\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Difference_Between_Debenture_and_Share_Companies_Act_2013\" >Difference Between Debenture and Share (Companies Act 2013)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Share\" >Share<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Meaning_of_Share\" >Meaning of Share:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Debenture\" >Debenture<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Meaning_of_Debenture\" >Meaning of Debenture:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/#Difference_Between_Debenture_and_Share\" >Difference Between Debenture and Share<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Difference_Between_Debenture_and_Share_Companies_Act_2013\"><\/span>Difference Between Debenture and Share (Companies Act 2013)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-left\"><span class=\"ez-toc-section\" id=\"Share\"><\/span>Share<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Share\"><\/span>Meaning of Share:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The term share is defined b Section 2 (84) of the Companies Act 2013, \u2018<a href=\"https:\/\/www.investopedia.com\/terms\/s\/shares.asp\" data-type=\"link\" data-id=\"https:\/\/www.investopedia.com\/terms\/s\/shares.asp\" target=\"_blank\" rel=\"noopener\">Share<\/a> means a share in the share capital of a company and includes stock\u2019.<\/p>\n\n\n\n<p>A share is a unit by which the share capital is divided. The total capital of the company is divided into small parts and each part is called share and the value of each part\/unit is known as face value. A share is a small unit of the capital of a company. It facilitates the public to subscribe to the capital in smaller amounts.<\/p>\n\n\n\n<p>A person can purchase any number of shares as he wishes. A person who purchases shares of a company is known as a shareholder or a member of that company.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"512\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Difference-Between-Debenture-and-Share-1024x512.png\" alt=\"Difference Between Debenture and Share\" class=\"wp-image-4464 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Difference-Between-Debenture-and-Share-1024x512.png 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Difference-Between-Debenture-and-Share-300x150.png 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Difference-Between-Debenture-and-Share-768x384.png 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/08\/Difference-Between-Debenture-and-Share.png 1200w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/512;\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-vivid-green-cyan-background-color has-background\"><span class=\"ez-toc-section\" id=\"Debenture\"><\/span>Debenture<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Debenture\"><\/span>Meaning of Debenture:<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Debentures are one of the principal sources of raising borrowed capital to meet long and medium-term financial needs. Over the years debentures have occupied a significant position in the financial structure of the companies.<\/p>\n\n\n\n<p>The term debenture has come from the Latin word \u2018debere\u2019 which means to \u2018owe\u2019.<br>The term debenture has not been defined clearly under the Companies Act.<br>Sec 2(30) of the Companies Act 2013, only states that \u2018the word debenture includes debenture stock, bonds and another instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not.<\/p>\n\n\n\n<p>Under the existing definition, debenture includes debenture stock. Debenture means a  document that either creates or acknowledges debt. Ordinarily, debenture constitutes a charge on some property of the company, but there may be a debenture without such charge.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-fixed-capital-and-working-capital\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-fixed-capital-and-working-capital\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Fixed Capital and Working Capital<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-owned-capital-and-borrowed-capital\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-owned-capital-and-borrowed-capital\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Owned Capital and Borrowed Capital<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-debenture-and-share\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Debenture and Share<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/difference-between-preference-shares-and-equity-shares\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/difference-between-preference-shares-and-equity-shares\/\" target=\"_blank\" rel=\"noreferrer noopener\">Difference Between Preference Shares and Equity Shares<\/a><\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Difference_Between_Debenture_and_Share\"><\/span>Difference Between Debenture and Share<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Points<\/strong><\/td><td><strong><strong>Shares<\/strong><\/strong><\/td><td><strong>Debenture<\/strong><\/td><\/tr><tr><td>1) Meaning<\/td><td>A share is a part of share capital<br>of a company. It is known as<br>ownership securities.<\/td><td>A debenture is a certificate of loan<br>taken by a company. They are also<br>known as creditorship securities.<\/td><\/tr><tr><td>2) Status<\/td><td>A holder of shares is the owner of<br>the company. Therefore share capital<br>is owned capital.<\/td><td>A holder of debenture is a creditor<br>of the company. Debenture capital is loan capital or borrowed capital.<\/td><\/tr><tr><td>3) Nature<\/td><td>It is permanent capital. It is not<br>repaid during the lifetime of the<br>company.<\/td><td>It is temporary capital. Generally<br>it is repaid after a specific period.<\/td><\/tr><tr><td>4) Voting right<\/td><td>Shareholders being owners enjoy<br>normal voting rights in general<br>meeting. They participate in the<br>management of the company.<\/td><td>Debentureholders being creditors,<br>do not have any voting rights.<br>They can not participate in the<br>management of the company.<\/td><\/tr><tr><td>5) Return on Investment<\/td><td>Return on shares is called<br>dividend. Equity shareholders<br>receive divided at fluctuating rate<br>whereas preference shareholders<br>receive divided at fixed rate.<\/td><td>Return on debenture is called<br>interest. It is fixed at the time of<br>issue. Interest is paid even when<br>company has no profit.<\/td><\/tr><tr><td>6) Security<\/td><td>Share capital is unsecured capital.<br>No security is offered to the<br>shareholder.<\/td><td>Debenture capital being loan<br>capital is secured by creating a<br>charge on Company\u2019s property.<\/td><\/tr><tr><td>7) Time of Issue<\/td><td>Shares are issued in the initial<br>stages of the company formation.<\/td><td>Debentures are issued at a later<br>stage, when the company has<br>properties to offer as security.<\/td><\/tr><tr><td>8) Suitability<\/td><td>Shares are suitable for long term<br>finance.<\/td><td>Debentures are suitable for medium-term finance.<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":4464,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[2132],"class_list":["post-4454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-misc","tag-difference-between-debenture-and-share"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=4454"}],"version-history":[{"count":4,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4454\/revisions"}],"predecessor-version":[{"id":39255,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/4454\/revisions\/39255"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/4464"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=4454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=4454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=4454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}