The main difference between stakeholders and stockholders is that shareholders are those who have a vested interest in a business, while stockholders are those who hold stocks in a business.
Stakeholders and shareholders are two important parties in a business. Shareholders are stakeholders of a business as they have a vested interest in the company and are affected by its business performance. But not all stakeholders are not shareholders.
Key Areas Covered
1. What are Stakeholders
– Definition, Features
2. What are Stockholders
– Definition, Features
3. Difference Between Stakeholders and Stockholders
– Comparison of Key Differences
Key Terms
Stakeholders, Stockholders
What are Stakeholders
Stakeholders are individuals, groups, or organizations that have a vested interest in a business and can affect and be affected by the business operations and performance. Traditionally, stakeholders of a business usually included investors, employees, suppliers, and customers, but with the concept of corporate social responsibility, stakeholders also include communities, trade associations, and governments.
Moreover, there are two types of stakeholders; they are internal and external stakeholders. Internal stakeholders are people within the organization. They serve and are employed by the business; therefore, the business directly impacts them. Some examples of internal stakeholders include employees, the board of directors, project managers, owners, and investors. Whereas, external stakeholders are those who are outside of the organization. They are the ones who get indirectly impacted by the business. Examples include customers, suppliers, creditors, competitors, society, and the government.
Despite the common confusion, stakeholders are not the same as shareholders. But shareholders are stakeholders of a business. But not all stakeholders are not shareholders.
What are Stockholders
Stockholders are individuals, companies, or organizations that hold the stocks of a business. To be a partial owner, a stockholder must at least own one share in a company’s stock or mutual fund. Another name for stockholders is shareholders. The position of a shareholder has certain rights and responsibilities. They have to right to vote on matters related to the business and can even be elected to be a member of the board of directors.
If the company performs well, stockholders profit from it as they receive dividends. However, when the company loses money, the share price drops, making shareholders lose money or experience declines in their portfolios. Furthermore, there are two types of stockholders; they are majority stockholders and minority stockholders. Here, a majority stockholder is a stockholder who owns and controls more than 50% of a company’s shares. Whereas, minority stockholders are those who hold less than 50% of stocks in a company. In general, most founders of the company are majority stockholders.
Difference Between Stakeholders and Stockholders
Definition
Stakeholders are individuals, groups, or organizations that have a vested interest in a business and can affect and be affected by the business operations and performances, while shareholders are individuals, companies, or organizations that hold the stocks of a business.
Examples
Stakeholders include investors, employees, suppliers, customers, trade associations, communities, and government, while stockholders include all those who own at least one share of the company’s stocks.
Ownership
Stakeholders have an interest in the business, but they don’t necessarily own it, whereas stockholders partly own the business through shares and stocks.
Impact
Stakeholders are directly or indirectly impacted by the activities of the company, while stockholders are directly impacted.
Type of Companies
All types of companies have stakeholders, but only companies that issue shares have stockholders.
Focus
Stakeholders mainly focus on the company’s performance and goodwill, while stockholders mainly focus on the company’s ROI (return on investment).
Conclusion
The main difference between stakeholders and stockholders is that shareholders are those who have a vested interest in a business, while stockholders are those who hold stocks in a business. Moreover, shareholders are stakeholders of a business as they have a vested interest in the company and the business’ performance directly affects them. But not all stakeholders are not shareholders.
Reference:
1. “What Are Stakeholders: Definition, Types, and Examples.” Investopedia.
2. “Shareholder.” Corporate Finance Institute.
Image Courtesy:
1. “Stakeholder (en)” By Grochim – Commons (CC BY-SA 3.0) via Commons Wikimedia
2. “Shareholders” By EpicTop10.com (CC BY 2.0) via Flickr
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