Tax Question:

What is the difference between an individual who owns share capital (a shareholder), a director and an officer of a private corporation?


Shareholders are those who hold share capital of the corporation. There may be numerous shareholders who each hold different amounts of different classes of shares. These shareholders participate in controlling the corporation if they hold voting shares.

A director of a corporation may or may not hold shares of the corporation. There may be one director or a board of directors for a corporation. The directors are responsible for making broad top-level business decisions.

An officer is appointed by the board of directors of the corporation. The officers oversee the daily aspects of the business. Typical corporate officers include Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer (CFO), President, Treasurer and Secretary.


The voting shareholders elect the director(s) of the corporation and determine the compensation each director will receive. It is ultimately the voting shareholders that control the management of the corporation as they choose the directors, outline the directors’ duties and mandate in the corporate bylaws.

It is the directors’ responsibility to develop a strategic plan for the corporation and to oversee the corporation’s operations in pursuit of success and in accordance with their duties as outlined in the bylaws. These operations include the appropriate filings and remittances to Canada Revenue Agency. There is directors’ liability associated with these responsibilities. For more information on directors’ liability.

The director(s) identify the appropriate roles required to manage the daily aspects of the business and appoint officers to fill these roles. The officers manage the corporation’s business activities as laid out in their job descriptions and report to the directors.

Dawn Loeffler, BA (Hons), CPA, CA
Manager, Gilmour Group CPA’s
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