Shareholder
A Shareholder is a person, business, or trust that owns shares in a company. Shareholders are the legal owners of the business and may receive dividends, voting rights, and capital gains. Lenders consider shareholder structure—especially majority or controlling shareholders—when approving Business Loans, Invoice Finance, and Business Lines of Credit. Shareholders may or may not be Directors.
Why Shareholders Matter in Lending
While directors usually sign loan documents and guarantees, lenders still consider shareholders because they influence business control and ownership.
- Major shareholders impact company voting power and control
- Ownership changes may require lender approval
- Shareholder disputes can affect cashflow and loan servicing
- Lenders review ASIC records for shareholding structure
- Shareholders may also be beneficiaries in a Trading Trust
Shareholding structures are especially important for Pty Ltd companies and Public Companies.
Types of Shareholders
- Individual shareholders (common for small businesses)
- Corporate shareholders
- Shareholders in a trust structure
- Majority vs minority shareholders
- Founding or seed shareholders
Official reference: asic.gov.au
Do shareholders manage the company?
Not necessarily — directors manage daily operations, while shareholders own the company.
Do shareholders need to give guarantees?
Only if they are also directors or significant controllers of the business.
Can shareholders be removed?
Yes — but only according to the company constitution or shareholder agreements.
Does a shareholder need to be a director?
No — they are separate roles. Many shareholders are passive investors.
Can a trust be a shareholder?
Yes — many businesses use trading trusts or family trusts as shareholders.