Director Vs Share Holder | Liability VS Benefits | Who is Real Owner? Corporate Governance Structure

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Directors & Shareholders often play a crucial role in running a business. Now let’s just dive deeper into the major differences between the Shareholders and Directors.
When a specific company is in need of capital, then it issues shares to the Shareholders. So, you can say that in one way Shareholders are the company owner. On the other hand, a Company Director oversees financial insights, strategic planning, while referring to the management in day to day operations. Hence, in order to handle these operations the right way, the Shareholders appoint Company Directors to ensure these management processes are handled professionally. The major decisions of the company are taken by its shareholders, whereas, the appointed Directors take internal decisions of the company.
Individuals can become the Shareholders of the company by purchasing its shares, whereas Directors are those individuals appointed by the shareholders. Directors are held responsible for the company liabilities, compliances. Majority of the Shareholders can remove the Company director from his or her position on account of any mis- management. Shareholders gain a dividend on behalf of their shareholding, whereas Directors receive the remuneration as Professional fees.
For any queries, you can consult with the experts from One Click Business Solutions. Get the best guidance for Company Registration, Company Compliances.
Company directors
• Also known as company officers
• Can be a natural person (human) or a corporate body (i.e. another company)
• A limited company must always have at least one human director in office
• Minimum age requirement of 16
• Can also be shareholders
• Director appointments are authorised by shareholders
• Responsible for managing a company lawfully and ethically in accordance with the Companies Act 2006 and the Articles of Association
• Required to run the business within the scope of powers prescribed by the Articles
• Expected to promote the success of the business, with a view to making a profit for the benefit of the company and its shareholders
• Receive a salary (and dividend payments, if also a shareholder)
• Rights and powers are determined by shareholders
• Legally responsible for delivering annual accounts, Confirmation Statements, and Company Tax Returns by the statutory filing deadlines
• Must ensure all company taxes are paid on time
• Can be removed and disqualified if they are incompetent, display ‘unfit’ conduct, or breach their contract in any way
• Can be held personally liable and prosecuted if they fail to uphold their legal responsibilities and duties
• Normally authorised to issue and transfer shares, subject to the powers prescribed by the Articles of Association
About company shareholders
• Also known as members. The first shareholders are known as subscribers
• Can be a natural person or a corporate body
• Own some or all of a company by taking shares in the business
• Liability is limited to the nominal value of their shares. If the company gets into debt, members are only responsible for contributing the nominal value of their shares
• Can also be directors
• Receive a portion of company profits in relation to their shareholdings
• Not involved with everyday business activities or management, unless they are also directors
• Have the power to appoint and remove directors and company secretaries
• Can choose which powers and rights are granted to directors
• The proportion of ownership of the company depends on the number, value, and class of shares held
• Their voting rights, capital rights, and dividend rights depend on the Prescribed Particulars attached to their shares
• Make decisions about significant issues such as changing the company name or structure, investment opportunities, issuing shares, appointing an auditor
• Normally have a right to any surplus capital if the company is wound up
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