The bond holders are owners of the company.

Ans. This statement is False.

Reasons: According to Webster’s Dictionary, a bond is an interest bearing certificate issued by a government or business, promising to pay to the holder specified sum at a specified date. In fact there is no difference between bonds and debentures.

(1) Bond is a loan taken by company for medium to long period. Bond holder therefore is the creditor of the company.

(2) Bond capital is returnable and therefore has no permanency. Bond holder earns interest as return.

(3) Bond holder cannot participate in management of company. They cannot take any decision on matters of the company.

(4) Bond holder has no voting rights on matters related to company like he cannot appoint Directors / Auditors of the company.

(5) The real owner of the company is the equity shareholder. Equity shareholders are risk bearers of the company and they are having the voting rights and taking participation in management of the company. Hence bond holders are not the owners of the company.