The capital of a company is divided into a number of very small units called shares. The person who holds a share is a share holder and he is a debtor of a company(ie) he is liable to all the assets and liabilities of that company. The return on investment of a share is dividend. Dividend is not fixed to a particular percentage. A shareholder can participate in the management of the company. A share holder can vote during company meetings.
A debenture is an acknowledgement stating the debt of a company. A holder of a debenture is a creditor of the company. when the company is being wound up the debtors should be given first preference during the repayment of capital. The return on investment of a debenture is interest. interest is fixed to a particular percentage. A debenture holder cannot participate in the management of the company. A debenture holder cannot vote during the company meetings.