Page 3 - LN ISSUE OF DEB

subject to the conditions company in any manner it

given in Section 78 of the likes.

Companies Act 1956.

8. Purchase A company cannot purchase A company can purchase own

its own shares debentures from the open

market.

9. Shares cannot be converted Debentures can be converted

Convertibility into debentures. into shares according to the

conditions of issue of

debentures.

10. Control A shareholder has the right A debenture holder does not

to control the affairs of the have any right to control the

company by exercising his affairs of the company.

right to attend the general
meeting of the company and

by exercising his voting right.

11. Winding At the time of winding up the Debenture holders have a

up shareholders are paid their priority as to return of amount

capital at the end. received from them in the

event of winding up of the

company.

Distinction between Shareholders and Debenture holders

Basis Shareholders Debenture holders

Shareholders are Debenture holders are
Ownership considered as the considered as Creditors of

owners of the company the company