Can shareholders and directors of a private limited company be different?

Yes. They are certainly different.

Although in a Private Company, most of the times the directors and shareholders are same, both the designations are different and distinct.

The shareholder is person who owns the company in proportion to shares held by him. The Director is one who manages day-to-day task.

The organisation structure itself comes with special characteristic of separation in management and ownership. That means the managerial personnel (directors) and owners (shareholders) may be different (although not necessarily).

It is at the discretion of shareholders whether to appoint different person as a director of the company or not.

Also, by inserting a clause in AoA, the shareholders may mandate that every director must subscribe to shares for being appointed in the company.

The concept goes same like any public company, say RIL or Adani or BHEL. The shares are owned by hundreds of people in public but only few are handling the company really being placed in the Board of Directors.

I hope this help you.

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