Set up Limited Company

What are the differences between Directors, Shareholders & Employees?

The difference between director and shareholder lies in their roles and responsibilities within a UK limited company. Directors manage day-to-day operations and have legal duties to Companies House and HMRC, while shareholders own the company and receive profits through dividends. Understanding these distinct positions is crucial for proper company governance and compliance.

Last updated
August 8, 2025
Limited Company AccountantDirectors and shareholders help
Speak to a Limited Company accountant

Book a free consultation to disucss the differences between directors, shareholders and employees.

What are the differences between Directors, Shareholders & Employees?

Directors

  • Directors have the responsibility of running and managing a Limited company;
  • Directors are responsible for ensuring all company accounts are filed with HMRC and Companies House;
  • Directors must have board meetings to decide on company activities – including taking a dividend.

Shareholders

  • Shareholders are not involved in the running and managing of the Limited company;
  • Shareholders are involved in some decisions, like the change of company name, however not day to day running;
  • Shareholders are entitled to take dividends from the company, as long as these can be justified from their role in the company.

Employees

  • Employees work for the Limited company and are employed. They will receive a monthly salary from the Limited company.
  • They are not part of any decision making process and do not have any rights to dividends.
Directors and shareholders help
Accountant for Limited Company
Speak to a Limited Company accountant

Book a free consultation to disucss the differences between directors, shareholders and employees.

Read more limited company set up guides

Sole Trader vs Limited Company - Find Your Best Fit
CalculatorsSole Trader vs Limited Company Calculator and Assessment

Our sole trader vs limited company calculator helps you determine the most tax-efficient business structure by comparing your potential take-home income, National Insurance contributions, and Corporation Tax liabilities. Simply input your expected annual profit to receive an instant comparison showing which option could save you money with HMRC.

Calculate now
Registering a Limited Company Guide
Free download
Registering a Limited Company Guide

We walk through every step of the Limited Company registration process to help you understand whether you should start the limited company registration process.

Email address:

Thank you for downloading our free guide. We've sent you an email with your guide!
Oops! Something went wrong while submitting the form.
Woman standing in front of icons in a circle of accounting service icons for industries for contractors, ecommerce, tech and consulting

Small business accounting support for a range of industries

You get a named accountant you can speak to any time, plus we take care of all your essential filings. Whether you're looking for an accountant in London or online accountants, we've got you covered: