Blog entry by Ukpe Amayo

Anyone in the world

Often times people invest in companies without a clear view of what they have at stake in the company or business. the question is what is the company offering to you as a shareholder or a bondholder? there is this believe that share holders are given preference when a company or business goes into  bankruptcy.

who are the shareholders? they are regarded as individuals or institutions that legally own shares in the company or business

who are the bondholders? these are the creditors of the company. 

while the bondholders take the higher risk in the business because bond usually have expiry date or a defined term, shareholders usually do not have definite or defined term.

shareholders are allowed to vote during meeting in the company but bondholders cannot vote.

WHO IS GIVEN PRIORITY IN A BUSINESS

The bondholders are usually given priority when there is bankruptcy, they are usually paid first before the shareholders

in general terms, most people will prefare to be bondholders than shareholders. when a company goes down or bankrupt, the bondholders have the right to take over the business because they are the creditors, while the shareholders may lose their whole money.