This distinction becomes extremely important when businesses have multiple shareholders. It explains why shareholders cannot simply take company assets home because they own shares, and it also matters when companies are sold, valued or liquidated.
Source: Companies Act 71 of 2008
Frequently Asked Questions
What does a shareholder actually own?
A shareholder owns shares carrying the rights attached to those shares.
Can a shareholder sell a company asset personally?
Generally, no — company assets belong to the company.
Why does this distinction matter during liquidation?
Company assets are dealt with through the liquidation process, while shareholders have rights determined by the company's financial position and applicable law.