Can you be a shareholder but not a director?
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Shareholders and directors have two completely different roles in a company. The shareholders (also called members) own the company by owning its shares and the directors manage it. Unless the articles say so (and most do not) a director does not need to be a shareholder and a shareholder has no right to be a director.
Yes, a person can be a founder, director and a shareholder. However, in fulfilling the duties and responsibilities of one role, you must ensure you do not ignore your duties of another role.
Does cofounder mean owner?
A founder is a person who has the initial idea and establishes a business. A co-founder is the one who goes along with that founder’s initial thoughts and helps make the new company flourish.
When a company wants to remove a minority shareholder, they have the option of buying back the shares. However, the shareholder can refuse to do this. So the next option is rather drastic and time-consuming. The company can be wound up (voluntarily).
Is it legal to be a founder of your own business?
There is no law to say that you are or are not a founder of a business. It is up to you and the people who call themselves ‘founders’. You do not necessarily have to invest in your company to be a founder. However, founders will often have lent money to their company, or have bought shares in the company to get it up and running.
Do you need to distinguish between being a founder director and shareholder?
You need to distinguish between your roles as a founder, director and shareholder, as each position comes with different responsibilities and rights. There is a risk you might fail to comply with your duties in one capacity because you were only thinking of another. If this occurs, there may be legal consequences.
You become a shareholder in a company if you buy shares in the company. This includes any shares you purchase when the company is first set up. What Rights Do I Have? Whilst the directors control the day to day running of the company, some of the most important decisions are left to the shareholders.
Can I appoint myself as a company director?
The law and your company’s constitution or shareholders agreement will determine whether the shareholders and directors can appoint you as a director. You must give a signed piece of paper saying that you consent to act as a director of the company before being appointed. What Rights Do I Have?