What is the difference between a director and a shareholder?

Directors are the decision makers for the company whereas shareholders are the owners.

A shareholder can also be a director and this is a relatively common set up for limited companies.

The shareholders own shares in the company and various rights can be attached to these shares. For example, an ordinary share class would give the owners of the shares to have full rights with regards to voting, dividends and participation. Shareholders can be paid dividends when the company has made profit.

Directors, on the other hand, work for the company and make decisions with the interests of the company in mind. They are responsible for the day to day running of the business.

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