Debenture holders are creditors to the company. The money invested by debenture holders is basically borrowed capital for the company that it has to pay back with regular interest. This makes debenture holders creditors to the company and at a higher status than shareholders. This means that if the company runs into major debts and is going under liquidations, the creditors of the company including banks, debenture holders, and others will be paid off first. Shareholders are given the last priority. However, unlike shareholders, debenture holders do not get voting rights. This is a major feature that can help you distinguish between shares and debentures.  Debenture means a document acknowledging a loan made to the company & providing for the payment of interest on the sum borrowed until the debenture is redeemed. It may or may not be under the seal of the company & may or may not create a charge on the assets of the company (though such charge usually exists. Interest on debentures is payable whether there are profits or not. But dividend on shares is to be paid only when the company has earned profits. Interest on debentures may be paid out of capital but dividend on shares can never be paid out of capital. Debentures are generally secured and carry a charge on the assets of the company whereas shares have no such charge. The debenture-holder, being a secured creditor of the company, is paid-off prior to a shareholder in the event of winding up of a company. A company can repay the debentures in accordance with the terms of the issue but save in the case of redeemable preference shares, the share capital cannot be repaid without legal formalities.Debentures can be issued at a discount whereas shares cannot be issued at a discount except as provided under section79 of the companies act.

Shareholder 

• Member of the Co
• Has a right to vote
• They get dividend only out of profits.
• In winding up, they cannot claim unless all creditors have been paid in full.

Debenture holder

• Creditor, lender to Co 
• No voting rights
• Entitled a fixed rate of interest which the Co must pay irrespective of profits.
• As secured lenders, they have a prior claim for repayment.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.