Shareholders own the company but directors are in charge of the business. Directors are the brain of the company.
Shareholders their control rights over the business in many ways, for example, using voting rights during shareholders’ meeting (some directors’ decision must be approved by shareholders), or elect someone into the board of directors. This happens in big corporations where there are many shareholders and only some big shareholders can have influence in the business.
In case of small companies, especially private companies, directors are also shareholders, but keep in mind that shareholders cannot make direct decision in regards of the company’s business matters, only directors have the rights to.
Therefore, even though the company is liable for its own debts and shareholders’ liability is limited, creditors may sue the directors to get more compensation. Corporate Act implies strict rules on directors’ duties with the company.
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