Directors and Shareholders

What is the difference between Directors and Shareholders?

The shareholders of a company are the people who invest money in a company by buying the shares and they appoint the directors to run the company. In other words the directors run the company and the shareholders own the company. The shareholders can therefore fire the directors if they do not do a proper job. However, the shareholders can be and often are also directors of the company. This concept is often misunderstood during the company registration creation process. There must always be a minimum of one director appointed on a company or the company registration will not be completed. The directors must be natural persons older than 18 years, therefore no minors nor companies can be appointed as directors of a company.

In terms of the liability a shareholder can only lose the amount of money they paid for the shares i.e. the value of the shares can never be less than zero. The directors even though they may not be shareholders can be held personally liable, and even if they have invested no money into the company can be sued personally.