v Share
is a subdivision of the capital of the company
v Each
share has a distinct number
v Each
share is given a face value which is paid by the shareholder
v There
are two main types of shares
Difference between Preference Shares and
Ordinary Shares
Preference Shares
|
Ordinary Shares
|
v Dividend
is paid first
v At
the time of winding up, share capital will be returned before that of ordinary shares
v It
gets a fixed rate of dividend
v It
gives no voting right
|
v Dividend
is paid last
v At
the time of winding up, share capital will be returned after that of
preference shares
v No
fixed rate of dividend
v It
gives voting right
|
Debentures
Debenture is a document which acknowledges
a loan to the company. It is a part of the loan capital of the company.
Debenture carries a fixed rate of interest which must be paid whether the
company makes profit or not.
Difference between Shares and Debentures
Shares
|
Debentures
|
v Shareholders
are owners of the company
v Ordinary
shareholders get no fixed rate
v Its
reward is based on company profits
v Ordinary
shareholders have voting rights
|
v Debenture
holders are not the owners
v It
carries a fixed rate of interest
v It
is paid irrespective of profitability
v Debenture
holders have no voting right
|
