Accounting Dictionary

Stakeholder

A stakeholder is someone who will be hurt if the business fails.

If a business fails, the employees will be hurt because they will lose their jobs, investors will be hurt because they will lose their money, the town will be hurt because they will lose tax revenue, suppliers will be hurt because they will lose a customer, and customers will be hurt because their warranties will no longer be valid and there will be no replacement parts. Therefore we can say employees, investors, the town, customers, and suppliers are all stakeholders.

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