Is a Director Also an Owner of a Business?

A lot of people assume that if you’re a director, you automatically own the company. In reality, being a director and being a shareholder (owner) are two different things—though one person can be both.

Director vs. Shareholder: What’s the Difference?

A director:

• Manages the day-to-day running of the company

• Makes strategic and operational decisions

• Has legal duties under the Companies Act 2006

• Is responsible for filings, records, and compliance

A shareholder (owner):

• Owns part of the company through shares

• Receives dividends (when profits allow)

• Has voting rights on major company decisions

• Can appoint or remove directors (in most cases)

Think of it this way: A director runs the company. A shareholder owns the company.

They play different roles, but both are essential.

Can a Director Be an Owner?

Yes, absolutely. Many small businesses in the UK operate with the same person acting as:

• Director,

• Shareholder, and

• Sometimes even company secretary.

This is common in sole-director limited companies.

But in larger businesses, owners and directors are often separate. Shareholders (owners) invest money, while directors are appointed to manage the business professionally.

Why the Distinction Matters

Understanding this difference helps avoid confusion around:

• Who controls day-to-day operations (directors)

• Who is entitled to company profits (shareholders)

• Who is legally accountable for compliance (directors)

• Who has the final say in big decisions like selling the company or issuing new shares (shareholders)

It also helps individuals recognise their obligations. For example: even if you don’t own the company, becoming a director means you have legal responsibilities, not just an honorary title.

If You’re Both Director and Owner

You wear two hats:

• As a director, you must act in the best interests of the company.

• As a shareholder, you may want to maximise your return.

These can sometimes conflict—which is why the law treats each role separately, even if the same person holds both positions.