Ownership and control

It normally happens in large companies.

Shareholders (members) own the company but most do not have any day-to-day control of what the company decides to do. That function is carried out by the company’s directors – who might own no shares at all in the company.

Ultimately, shareholders can sack directors and replace them. Therefore, shareholders have final control as they can appoint directors who will carry out their wishes. However, on a day-to-day basis shareholders (owners) have no easy way to control directors’ management decisions.