So many people plan to form a company without knowing what the differences are. So, here we go –

• Shareholders are the owners of the company. They have no say in how it is run and the only decision they make is who they appoint as the directors.
• Directors are appointed by the shareholders to run the company for the benefit of the shareholders. There are two types of director –

• • Executive directors are employees of the company and earn salaries
  • Non-executive directors are not employees of the company. They sit on the Board and receive directors’ fees. They take part in the overall planning and directing. It is the executive directors who implement the Board’s decisions.

• Members. This term is sometimes used to describe the shareholders of a company, but is more commonly associated with Close Corporations. The members of a CC are the equivalent of its shareholders and directors rolled into one. They are not separate functions.