Shareholders vs. Stakeholders

Difference Between Shareholders and Stakeholders People can hold shares and or have stakes in a company and get…

Difference Between Shareholders and Stakeholders

People can hold shares and or have stakes in a company and get financially involved in a company. Shareholders have some shares in their name and they get part ownership up to the percentage of their shares while Stakeholders may or may not have any share on their name but they have their vested interests in the company. These are two words which appear quite confusing and this is why we try to explain these two words and differentiate between two of them.

All the companies release their shares in the market to get public money for their business. In return they offer share in profit. Shares are bought by the common people through the share market. If you hold shares of a company then in a way you hold some ownership in the company. Shareholders are affected by the way a company performs and thus they also become the stakeholders If the company earns profit then the share holders get a part of that profit through the increased rates of their shares else the rates of the shares dip with the dipping profits of a company.

Anyone who has any direct or indirect interest in the company is known as stakeholder. The people who work for the company, their families, the people who invest in the company, the people who supply raw materials, the buyers, the customers and all other people who would have any interest in the company are stakeholders.

According to corporate social responsibility the companies must take all the decisions by keeping the interests of the stakeholders in mind. Although shareholders invest money in the company but stakeholders are affected more than the shareholders because shareholders only have financial interest in the company. In a broader perspective even the general public is stakeholder in a company and anything that affects its interests then the regulations and laws can stop the company from doing anything that is not good for the masses.

Some of the main differences between Shareholders and Stakeholders are:

  • Shareholders invest money in a company while stakeholders may or may not do so.
  • Shareholders have financial interest in the company while the interests of Stakeholders vary according to their association with the company.
  • Shareholders are stakeholders but stakeholders may or may not be shareholders.

Shareholders have direct interest in the company while stakeholders may have direct or indirect interest in the company.

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