Skip to main content
Please enable JavaScript in your browser to complete this form.

Name

100% Confidential Advice
We Know Insolvency Inside Out

Share This Page!

Overview Of What Is A Shareholder

Shareholders own the company in which they have shares. They can also run them if they appoint themselves as Directors.

A Shareholder does not run a company day to day but can participate in voting on matters concerning the company’s constitution if their shares have voting rights.

However such matters are really controlled day to day by Directors who upon appointment control the company.

Difference Between Shareholders And Directors

A Shareholder’s key right is their ability as a group to remove and appoint Directors. Directors have a duty to run a company in the interests of the shareholders. Shareholders have the right to obtain financial performance information such as annual accounts. If Directors are not transparent then that is one of the key reasons for the Shareholders’ exercise of rights of removal of directors.

Therefore the relationship between Shareholder and Director is somewhat akin to Trustee and Beneficiary.

There can be different classes of Shareholders so some shareholders might be able to vote on company constitution matters and the removal or appointment of Directors. However, some shareholders may have no voting rights and merely hold shares to receive a return in the form of dividends. These are commonly called Preference Shareholders, being distinct from Ordinary Shareholders who will usually have voting rights in most SMEs.

Shareholders’ liability is limited (hence the term limited liability) to the unpaid call (price) on their shares.

Can Shareholders Remove Directors?

Yes Shareholders can remove Directors if they have lost confidence in them. Section 168 of the Companies Act 2006 enables this to happen.

Removal of Director

How To Remove A Director

In order for a Shareholder to remove a Director a Meeting of the company needs to be convened. If a Director does not act in accordance with the wishes of Shareholders then pursuant to Section 303 of the Companies Act 2006, the Shareholders can requisition a Meeting to pass a resolution to remove a Director.

Shareholders Requisition of Meeting

What Next? Expert Advice Is Just A Click Away

If you have any questions in relation to What Is A Shareholder? then Contact Us as soon as possible for advice. Our expertise is at your fingertips.

Disclaimer: What Is A Shareholder?

This page: What Is A Shareholder? is not legal advice and should not be relied upon as such. This article What Is A Shareholder? is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

Recent Posts / View All Posts

Directors Are Entitled To Accounting Records At All Times

Directors Are Entitled To Accounting Records At All Times

| Director Duties | No Comments
Directors are entitled to accounting records at all times. That is what Section 388(1)(b) of the Companies Act 2006 says and to prove the point is the case of Suzui…
Limits Of Directors’ Powers To Grant Inter-Company Loans

Limits Of Directors’ Powers To Grant Inter-Company Loans

| Director Duties | No Comments
The limits of Directors’ powers to grant inter-company loans were highlighted in the case of Northern Powerhouse Developments Ltd & Ors v Woodhouse EWHC 3124 (Ch). This was a case…
Should Directors Be Required To Sit A Test To Form Their First Company

Should Directors Be Required To Sit A Test To Form Their First Company?

| Director Duties | No Comments
Should Directors Be Required To Sit A Test To Form Their First Company Overview Should Directors Be Required To Sit A Test To Form Their First Company? The answer is…
The Creditor Duty And Its Effect On An Overdrawn Director’s Loan Account

The Creditor Duty And Its Effect On An Overdrawn Director’s Loan Account

| Director Duties | No Comments
Overview Of The Creditor Duty And Its Effect On An Overdrawn Director’s Loan Account The matter of the Creditor Duty and its effect on an Overdrawn Director’s Loan Account highlights…