2. Shareholder(SH) is a member of the company; debenture holder(DH) is a creditor of the company.
3. Shares can't be issued at discount; debenture can be issued at discount.
4. SH has voting rights; DH has no such rights.
5. Return of capital to DH is obligatory to the company; return of investment to SH is subject to availability of capital.
6. Interest can be paid out of capital; dividend cannot be paid out of capital.
7. DH receive interest regardless of available profits; SH receive dividends from distributable profits.
8. Interest of DH can be paid out of capital; dividends must be from profits.
9. SH can challenge BOD for not issuing shares to raise capital; DH cannot challenge BOD if no debentures were issued.
10. Shares cannot be converted to debentures; debenture can be converted to shares, provided that it is convertible
11. Debentures can be transfered freely by DH; Shares can be transfered subject to BOD's approval.
i think that is exactly difference between shareholders and debenture holders:(
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