ZIMSEC O Level Commerce Notes: Differences between shares and debentures

Capital contributed by shareholdersLoan capital
Shareholders are owners of the companyDebenture holders are creditors to the company
Dividends may fluctuate e.g. Ordinary share dividendsInterest is fixed
Earn dividendsEarn interest
Dividends are only paid when a profit has been madeInterest is paid whether or not profit has been made
Are not attached or secured against company assetsCan be secured against company assets.
Can be ordinary or preference sharesCan be mortgaged or naked.
Are a risky form of investmentAre a more secure form of investment
Cannot force a company into liquidationCan force a company into liquidation
Ordinary shares have voting rightsAll debentures have no voting rights.

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