| | BONDS
| STOCKS
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| 1 | A bond is a note payable.
| A stock is a title of ownership.
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| 2 | A bond holder is a long-term creditor of the issuing corporation. | A stockholder is a partner of the issuing company. |
| 3 | The capital contributed to a company by the bond holder is a liability. | The stockholder has a shareholding interest in the company at a certain percentage. The capital contributed by it is the shareholders’ equity. |
| 4 | The bond holder does not hold any rights over the company's assets other than its receivables. It cannot participate in the management of the company. Interest payments are made first to bond holders out of the company’s gross profits. After the bond holders collect their receivables, they cannot allege any right over the company's assets. | Beneficiaries who become a partner of the company by purchasing stocks can use all the partnership rights vested in them. |
| 5 | Bond is limited to a certain term, and the legal relationship between the bond holder and the company ends at the end of that term. | Stock is not limited to a term, the relationship between the stockholder and the company is not limited to period, only the holder of the stock may change. |
| 6 | The proceeds of a bond is known and fixed. (Except floating-rate bonds)
| The proceeds of a stock is the increase in the stock’s price and the dividend allocated by the company. It is not certain in which year and how much proceeds a stock holder will earn.
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| 7 | Bonds may be issued at a value below the nominal value (at discount).
| Stocks cannot be sold at a price below the nominal value. |
| 8 | Apart from companies, bonds can be issued by public institutions with a legal personality such as the government and municipalities. | Stocks which represent a participation share may be issued by joint stock companies. (Limited partnerships divided into shares may issue stocks but these cannot be sold through public offering and traded on the stock-exchange.) |
| 9 | Bonds are redeemed within the scope of a redemption plan. | In principle, stocks are not subject to redemption. However, upon request, part of the stocks may be redeemed, and this means a capital decrease. Redemption of all the stocks means the liquidation of the company. |