WHAT IS THE DIFFERENCE BETWEEN DIRECTORS OF A COMPANY AND SHAREHOLDERS?

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The difference between directors of a company and shareholders is as follows:

 

  1. Role: Directors are responsible for managing the day-to-day operations of a company and making decisions on behalf of the company, while shareholders are owners of the company who have a right to vote on certain important matters and receive dividends.
  2. Authority: Directors have the authority to make decisions and take actions on behalf of the company, while shareholders have limited authority, such as the right to vote on major corporate decisions.
  3. Liability: Directors can be personally liable for the actions of the company if they breach their fiduciary duties, while shareholders are generally only liable to the extent of their investment in the company.
  4. Compensation: Directors may receive compensation for their services, such as a salary or fees, while shareholders typically receive compensation in the form of dividends or capital gains from the sale of their shares.
  5. Representation: Directors are the representatives of the company and are accountable to the shareholders, while shareholders are represented by the directors and the company’s management.

 

In summary, directors are responsible for managing the company, while shareholders are owners with a vested interest in its success.

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