Difference between Shareholder and Stockholder

Key Difference: Shareholder or stockholder refers to an individual or an organization that owns share(s) of stock in a joint-stock company. It is a legal process to own the shares. There is no difference between a shareholder and a stockholder. Therefore, shareholder and stockholder are used interchangeably.

Shareholder and stockholder may sound different. However, they both refer to the same thing. A shareholder can be simply denoted as the one who holds or owns stocks in a corporation. The minimum eligibility to be counted as a shareholder requires owning at least one share in the stock of the corporation. Corporation’s charter and bylaws define a range of rights that are provided to the shareholders like – right to vote at the shareholder’s meetings, share in the profits of the corporation, etc. Shareholders influence the actions of the companies in order to maximize their own financial returns.

They are often termed as the part-owners of a business. ‘Shareholder’ basically refers to the holder of a share which is generally defined as an equity share in a business.

The concept of shareholders and joint-stock corporations developed in Europe during the 17th and 18th centuries. Later, in the early 1800s, a center of stock trading got established in New York City, America. Since then, the definition of a shareholder or a stockholder has evolved. A stockholder has become an important part of the financial profile of a company. A shareholder can be an individual or can also be a large financial institution. 'Majority shareholder' is the one who holds more than half the value of a business. A shareholder can buy the shares from the corporation itself or from an existing shareholder. There are mainly two types of shareholders -

Individual investors – it refers to the individuals who invest their own money.
Institutional investors – it includes the organizations that invest the money of others like banks, insurance companies, etc.

Comparison between Shareholder and Stockholder:

	Shareholder	Stockholder
Definition	Shareholder or stockholder refers to an individual or an organization that owns share(s) of stock in a joint-stock company.	Stockholder is a synonym to shareholder. In U.S., the term is specifically preferred to denote a shareholder.
Origin	Old English scearu "a cutting, shearing, tonsure; a part or division, agent noun from hold, old English haldan (Anglian), healdan (West Saxon), "to contain, grasp; retain; foster, cherish"	Old English stocc "stump, post, stake, tree trunk, log," agent noun from hold, old English haldan (Anglian), healdan (West Saxon), "to contain, grasp; retain; foster, cherish"
Usage	Since 1830	Since 1753