What are the differences between being a Shareholder and a Director?

Becoming a director or shareholder in a business is such a huge accomplishment, accepting a responsibility as a key figurehead of that business and its profitability.

Being a director is very different to being a shareholder however, with many people confusing the two or thinking they mean the same thing. Shareholders and directors hold two vastly different roles in a company. Shareholders own the company by owning its shares and are often referred to as ‘members’.

Directors on the other hand, manage the business and its operations. Unless the articles of association state so, a director isn’t required to be a shareholder, and a shareholder has no legal right to be a director.

Of course, like all things in business, there are plenty of grey areas. We break down the main differences and rights, and how they influence all aspects of the respective businesses.

If you need some expert advice, reach out to our team who will gladly assist!