Investing let’s you have a say in a company. However, there is a common misconception on the difference between a shareholder and a stakeholder.
Simply put, a shareholder owns a stake in a public company through shares of stocks. A stakeholder holds an interest in a company through means other than shares. In many cases, stakeholders performances’ affect the growth of a company. For more context, shareholders are stakeholders, but stakeholders are not necessarily shareholders of a company.
Stakeholders can be:
- Owners and shareholders
- Employees of the company
- Bondholders who own company-issued debt
- Suppliers and vendors
Shareholders can be:
- an individual, company, or institution that owns at least one share of a company
The biggest difference between the two is that shareholders focus on a return on their investment. Stakeholders are more concerned about the performance of the company.
Like shareholders, stakeholders have an interest in a company’s performance. However, shareholders focus on the return of their investment and get to be part of its decision-making.
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