Shares & Shareholders

What’s the difference between Directors and Shareholders?

As a general rule: Directors manage day-to-day business activities, whilst Shareholders collectively own the company and make key decisions.

Directors must act in the bests interests of the company (even when this may conflict with their own personal interests), whilst shareholders are free to act in their own interests.

  • A proprietary company must have at least one director who usually resides in Australia. 
  • A public company must have at least three directors who all usually resides in Australia. 

A director can also be a shareholder of a company, which is common in smaller companies. It is possible for a small company to only have one director who is also the sole shareholder. Note that the sole director and member of a company must keep minutes (a written record) of their resolutions concerning the management of the company. These resolutions can be made by recording and signing the decision themselves.  

July 08, 2016 10:54