Sometimes makes confusion what is the difference between shareholders and directors? As Company Act, there is a certain number of shares required to become a director of a company.  If a person wants to be a director will have to purchase a share of a certain number as the qualification of a director. If one shareholder purchase a certain number of qualified shares may not be a director unless the existing director unanimously accepts the new director by Board Meeting.

For example:

Company NameQualification sharesPurchased shareDirector/ Shareholder
ABC LIMITED500499Shareholder (not director)

Shareholder: Who purchase shares of a company; any number of shares is called a shareholder.

Director: A shareholder who purchases shares up to the qualification of shares (as an example: 500) will be called the director of the company, provided that another all consent of all board of directors. But as the law, he/she will be qualified to be a director.

Appointed director: Any person can be appointed as a director if he/ she is hired as staff. Example: Sales Director, HR Director, Purchase Director etc.

They are the director and maybe a head of the department but are not shareholder directors of the company.

Shareholder director can be appointed as staff: Shareholder director of a company can be appointed as director of the sales department, HR department, Purchase department. He/ she can hold two positions at a time BUT is not allowed in all countries.


Company Registration Expert Since 2012