When the capital of the company is not sufficient to carry on business the company raise loan by issuing what is known as debenture debenture holder money treated as a loan whereas preference shareholder money treated as a capital of the company. Debenture holder is not a properitor of the company in the contest preference share holder is a properitor of the company. Preference share holder has a right to get bonus or dividend from the company but debenture holder has no right to get dividend.

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