Navigating the world of business structures can feel like learning a new language. One common question that arises when discussing corporations is: What Is Owner Of Corporation Called? The answer isn’t always straightforward, as it depends on the specific role and the ownership structure within the corporation. Let’s delve into the different terms used to describe those who own a corporation.
Decoding Ownership Titles in the Corporate World
The most common term for an owner of a corporation is a shareholder. Corporations are structured in a way that ownership is divided into shares of stock. When someone purchases these shares, they become a shareholder, meaning they own a portion of the company proportional to the number of shares they hold. Shareholder rights vary depending on the type of stock owned (e.g., common stock vs. preferred stock), but generally, shareholders have the right to vote on certain corporate matters, such as electing the board of directors. It is important to remember that shareholders are not personally liable for the corporation’s debts.
While “shareholder” is the overarching term, there are other ways to describe owners depending on their level of involvement and stake in the company. For example, a major shareholder who owns a substantial percentage of the company’s stock might be referred to as a “principal shareholder” or a “controlling shareholder.” These individuals often have significant influence over the company’s direction. To illustrate the different types of owners, consider this simplified table:
| Term | Description |
|---|---|
| Shareholder | General term for someone owning shares of stock. |
| Principal Shareholder | Owns a large portion of the company’s stock. |
| Controlling Shareholder | Owns enough stock to control the company’s decisions. |
It’s also crucial to distinguish between ownership and management. While shareholders own the corporation, the day-to-day operations are typically handled by a board of directors and executive officers (like the CEO, CFO, etc.). These individuals may also be shareholders, but their primary role is to manage the company on behalf of the shareholders. The relationship between owners and managers is a key aspect of corporate governance.
Want to understand more about the different types of corporate structures? Check out the articles below to learn more and gain a deeper insight into these complex topics.