Shares referred to stocks or equity, represent ownership in a company. When individuals purchase shares of a company, they acquire a portion of ownership in that company. Shareholders have certain rights, such as voting rights in shareholder meetings and the potential to receive dividends, which are distributions of the company's profits to its shareholders. The value of shares may fluctuate based on the company's performance and market conditions.

Debentures are instruments issued by companies or governments to raise capital. When an individual or entity purchases a debentures are included in essentially lending money to the issuer. The issue of debentures promises to repay the principal amount along with periodic interest payments at a specified rate. Unlike shares, debenture holders do not have ownership rights in the company; instead, they are creditors and have priority over shareholders in the event of bankruptcy or liquidation.

Difference between shares and debentures

Shares 

•  Ownership: When you buy shares, you're purchasing a portion of ownership in the company. Shareholders have ownership rights, including the right to vote at shareholder meetings and the right to receive dividends if the company distributes them.

•  Returns: Returns from shares come in the form of capital appreciation (the increase in the value of the shares) and dividends (if the company pays them).

•  Risk: Shareholders bear a higher risk compared to debenture holders. If the company faces financial difficulties, shareholders are the last to receive payment after all other creditors, including debenture holders, have been paid.

•  Convertibility: Shares are not convertible into any other form of security. However, some shares may have features such as voting or non-voting rights.

•  Marketability: Shares are generally more liquid than debentures because they can be bought and sold easily on stock exchanges.

•  Claim on Assets: Shareholders have residual claims on the assets of the company, meaning they are entitled to a portion of the company's assets after all debts and obligations have been paid.

Debentures

•  Borrowing: Debentures are a form of borrowing for the company. When an investor purchases a debenture, they are essentially lending money to the company.

•  Returns: Debenture holders receive returns in the form of periodic interest payments. These payments are usually fixed and predetermined.

•  Risk: Debenture holders are creditors of the company and have a lower risk compared to shareholders. They have priority over shareholders in receiving payments in the event of bankruptcy or liquidation.

•  Convertibility: Some debentures may be convertible into shares of the issuing company at a predetermined price and within a specified time frame.

•  Marketability: Debentures are generally less liquid than shares because they are not traded on stock exchanges. However, they can still be bought and sold in the bond market.

•  Claim on Assets: Debenture holders have a fixed claim on the assets of the company. In case of bankruptcy or liquidation, they are entitled to be repaid before shareholders.