Difference between Director and Shareholder

Difference between Director and Shareholder

1.Management

Director is responsible for management of the entity where the equity holder is not involved in the management of the entity.

2.Knowledge and experience

Director is supposed to have sufficient business knowledge to carry out the management effectively whereas equity holder needs not to have such knowledge and mainly relying on director expertise to run the business.

3.Minimum Number

A company has a minimum number of directors as prescribed by the regulator while the maximum number is also mentioned in articles of association. Equity where there is no maximum number requirement for equity holder.

4.Remuneration

Director is paid for the management in the form of salary and other benefits where shareholder is not entitled for any such benefits.

5.Dividend

Director is not paid any dividend for unless and until they hold some shares in the entity. Where the share holder are entitled for dividend.

6.Appointment

Director are appointed or elected by the shareholder in a general meeting where the equity holder becomes by purchasing shares.

7.Cession of office

Director can be removed by equity holder where share holder cannot be removed however he can sell his share his share any time as per his discretion.

8.Liability

Director has no liability in case of liquidation unless they hold .shareholder liability is limited to the par value of shares.