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Questions
Distinguish between a shareholder and a creditor.
Differentiate between shareholders and creditors as stakeholders of a commercial organisation.
Solution
| Basis of Distinction | Shareholders | Creditors |
| Type of stakeholder | They are internal stakeholders. | They are external stakeholders. |
| Nature of investors | They invest in the capital of the company. | They only give loans to the company. |
| Degree of risk | They assume a greater risk of loss of capital. | They assume a lesser risk of loss of loan. |
| Profit-sharing | They share in the profits of the company in the form of dividends. | They do not share in the profits of the company and receive only interest on their loan. |
| Membership | They are members of the company and have voting rights. | They are not members of the company, no voting rights. |
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