Stakeholder Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Stakeholder, written in plain English, along with examples of how it is used.

What is Stakeholder?

(n) Stake holder is the person holding money, article, goods properties etc., the ownership or title of which will be decided by a future event, result of a dispute involving such items, judgment in the pending case, establishment of legal possession etc.

History and Definition of Stakeholder

The term "stakeholder" originated in the 1700s as a reference to those who held money or property that was subject to being lost or won in a bet or wager. Today, the term has expanded to include anyone who has an interest or "stake" in a company, project, or other endeavor. This can include investors, employees, customers, suppliers, and even the community or environment in which the company operates.

From a legal perspective, stakeholders can have various degrees of power or influence over the outcome of a situation. For example, in a bankruptcy case, creditors are stakeholders who may be entitled to a portion of the assets of the bankrupt company. Similarly, in a merger or acquisition, shareholders of both companies are stakeholders who must approve the transaction.

Examples of Stakeholder

  1. In a software development project, stakeholders may include the product owner, developers, quality assurance testers, and end-users.
  2. In a publicly traded company, stakeholders may include shareholders, executives, board members, employees, customers, and community members.
  3. In a construction project, stakeholders may include the property owner, architects, contractors, and subcontractors.

Legal Terms Similar to Stakeholder

  1. Beneficiary - a person or entity who is named to receive assets or benefits from a trust, will, or insurance policy.
  2. Creditor - a person or entity to whom money is owed.
  3. Defendant - a person or entity being sued or accused in a legal proceeding.
  4. Plaintiff - a person or entity bringing a case to court.
  5. Trustee - a person or entity who holds and manages assets on behalf of another party or parties.