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Chapter: 12th Commerce : Chapter 26 : Company Law and Secretarial Practice : Companies Act 2013

Distinction Between Debentures and Shares

Distinction Between Debentures and Shares

Distinction Between Debentures and Shares


1. Debentures constitute a loan.

2. Middle and Lower Level

3. Debenture holder gets fixed rate of Interest which carries a priorities over dividend.

4. Debentures generally have a charge on the assets of the company.

5. Debentures can be issued at a discount without restrictions.

6. The rate of interest is fixed in the case of debentures

7. Debenture holders do not have any voting right

8. Interest on debenture is payable even if there are no profits i.e. even out of capital.

9. Interest paid on debenture is a business expenditure and allowable deduction from profits.

10. Return of allotment is not required for allotment of debentures.



1. Shares are part of the capital of a company.

2. Top level

3. Shareholders gets dividends with a varying rate.

4. Shares do not carry any such charge.

5. Shares cannot be issued at a discount.

6. Whereas on equity shares, the dividend varies from year to year depending upon the profit of the company and the Board of directors decision to declare dividends or not.

7. Shareholders enjoy voting right.

8. Dividend can be paid to shareholders only out of the profits of the company and not otherwise.

9. Dividend is not allowable deduction as business expenditure.

10. Return of allotment in e-Form No. 2 is to be filed for allotment of shares.


Navratnas Companies

1.Bharat Electronics Limited (BEL)

2.Container Corporation of India (CONCOR)

3. Engineers India Limited (EIL)

4. Hindustan Aeronautics Limited (HAL)

5. Hindustan Petroleum Corporation Limited (HPCL)

6. Mahanagar Telephone Nigam Limited (MTNL)

7. National Aluminium Company (NALCO)

8. National Buildings Construction Corporation (NBCC)

9. National Mineral Development Corporation (NMDC)

10. Neyveli Lignite Corporation Limited (NLCIL)

11. Oil India Limited (OIL)

12. Power Finance Corporation

13. Power Grid Corporation of India Limited

14. Rashtriya Ispat Nigam Limited

15. Rural Electrification Corporation

16. Shipping Corporation of India (SCI)


Maharatnas Companies

1. National Thermal Power Corporation (NTPC)

2. Oil and Natural Gas Corporation (ONGC)

3. Steel Authority of India Limited (SAIL)

4. Bharat Heavy Electricals Limited (BHEL)

5. Indian Oil Corporation Limited (IOCL)

6. Coal India Limited (CIL)

7. Gas Authority of India Limited (GAIL)

8. Bharat Petroleum Corporation Limited (BPCL)


How to propose the Name for a Company

1. Plural version of any of the words appearing in the name of an existing company is not allowed.

Example: Suppose a company exists in the name of "Eswar equipment Private Limited Company", then the name of "Eswar equipments Private Limited Company" will not be proposed.

Similarly, The following changes in existing company name is also not allowed

2. Changes in Type, Letter Case, Spacing or Punctuation marks

3. Joining words or separating words before or after the company name

4. Different tense or number of the same word

5. Different phonetic spellings or spelling variations

6. Intentionally misspelled words

7. Addition of internet related designation

8. Addition of common names or titles

9. Addition of name of place

10. Different combination of the same words

11. Translation of a word


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12th Commerce : Chapter 26 : Company Law and Secretarial Practice : Companies Act 2013 : Distinction Between Debentures and Shares |

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