Distinguish between shareholders and creditors
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Distinguish between shareholders and creditors
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Let us look for the basic of both Share holders and Creditors
[tex]\bf\fbox\red{Share \: holder}[/tex]
A shareholder is a partial owner of the company. A Shareholder is a person who is eligible for the dividends/profits share in the company.
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[tex]\bf\fbox\pink{creditors}[/tex]
A creditor is a person who has given some goods or services to the company on credit. A creditor has no ownership rights in the company and has no share in the profits or losses of the company.
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Shareholders
❥︎. Take part in policy decisions.
❥︎ Receives share in the profits as dividend.
❥︎ They are internal stakeholders.
❥︎. They share the risk of loss.
❥︎. They invest capital in the form of share capital in the company.
Creditors
❥︎ Do not take part in policy decisions.
❥︎ Receives only interest on their loan .
❥︎ They are external stakeholders .
❥︎ They do not or share less risk of loss .
❥︎ They only give loan to the company for a specific period of time.
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Stakeholders
★ They are internal Stakeholders
★They invest in the capital of the company
★They assume greater risk of loss of capital
★They share in the profit of the company in the form of dividends
★They are the members of the company have voting rights
Creditors
★They are external Stakeholders
★They only give loan to the company
★They assume lesser risk of loss of loan
★They do not share in the profit of the company and receive only interest on their loan
★They are not member of the company no voting rights
Explanation:
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