What is the difference between a shareholder and a partner?

The main difference between a shareholder and a partner is the level of control each has over the business. A shareholder, also known as a stockholder, is an individual or an organization that invests money in a company and is given ownership rights in return. Shareholders are, therefore, owners of the company, but the amount of control they have can vary based on the percentage of ownership they have. On the other hand, a partner is someone who has agreed to join together with other people in order to form a business. Collectively, they are known as partners and they share the profits and losses of the business in proportion to their investments. While shareholders have limited control over the company, partners have control over the day-to-day operations as well as the overall strategy of the partnership. Partners also have the right to vote on important decisions, such as to hire new employees, while shareholders do not. In California, partners have a legal right to be involved in the management of the business, but shareholders do not.

Related FAQs

What is the role of a corporate lawyer?
What are the major types of business liabilities?
What are the legal risks associated with starting a business?
What is the purpose of a contract?
What are the legal requirements for hiring employees?
What is the role of a corporate secretary?
What is the law of agency?
What is the purpose of antitrust legislation?
What are the requirements for employee benefit plans?
What are the different types of business entities?

What is the difference between a shareholder and a partner?

Related FAQs

Related Blog Posts