Where shares come with voting rights in the management of the company, debentures comes with a fixed amount of interest, whether or not company gives out profits. Shareholders are the owners of the company while debenture holders get repayment at priority before the shareholders at the time of winding up. In the stock market, share capital and debentures are familiar words when it comes to investment. Whenever a firm chooses equity to boost funds, the shares of the company are issued to the public and whoever buys shares gets an opportunity to be part of the company. The second is debt a company receives a loan from the public and also agrees to pay the interest regularly. There, the debenture is issued to the public and whoever buys it is known as creditors. They are considered as liabilities as they represent debts that the company needs to pay in the future. It is shown in the balance sheet as either current liabilities or long-term liabilities. Can debentures be converted into shares? Yes, convertible debentures can be converted either partially or fully into shares after a specified period of time.

Bridgit Peter

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