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LSDefine
Simple English definitions for legal terms
stakeholder
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A quick definition of stakeholder:
A stakeholder is someone who has an interest in a business or project and could be affected by how it turns out. This could include people like shareholders, employees, suppliers, the community, and the government. In some cases, a stakeholder might be a third party who holds money or property that is being disputed by other parties. They can file a legal action called an interpleader to have a court decide who should get the property.
A more thorough explanation:
In business law, a stakeholder is someone who has an interest in a company or project and could be affected by its performance or outcome. This could include:
- Shareholders
- Investors
- Employees
- Suppliers
- The community
- The government
For example, if a company is doing well, shareholders and investors may benefit by making more money. If a company is doing poorly, employees may be at risk of losing their jobs.
In some cases, a stakeholder may be a third party who holds or possesses money or property that is in dispute between two or more parties. This third party is called a stakeholder because they have a stake in the outcome of the dispute. For example, an insurance company may be a stakeholder in a dispute over who should receive a payout.
If there is a dispute over who should receive the money or property, the stakeholder may file an interpleader suit. This allows a federal district court to determine who should have the property. By doing this, the stakeholder can avoid being held liable by multiple parties.