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Who has a say in your company investments?
Generally, in a company that has gone public and has attracted shareholders, those shareholders will have a say in how the company invests.Companies will have shareholder meetings where the shareholders are invited to come and learn more about the company.They also have an opportunity to vote for directors or leadership.Some companies give these directors a say in investment decisions and others hold huge votes for all of their shareholders.The procedure may vary from company to company and may be dictated by state and federal laws.
Board of Directors The board of directors of a large company will usually have a say in investment decisions.Especially if they represent the shareholders' voice, the board of directors will be charged with making decisions for everyone with a share in the company.Sometimes, these directors may just be in charge of collecting the votes of the shareholders, or they may need to take those votes into consideration but still have the charge of making the final decision regarding investments.This will vary depending on the policy or each company. Venture Capitalists Companies that have decided to use venture capitalists to boost their business may surrender some decision making power when it comes to investments.Granted, this power would be discussed in the contract between the company and the venture capitalists, but many venture capitalists require large amounts of power in the company if they are going to invest in it.These investments would most likely be regarding how to take funds and place them back in the business. Owners and Co-Owners Smaller companies that have not gone public or attracted investors will have to decide who will make investment decisions.Owners and Co-Owners will usually take this responsibility.They may consult with a private investment firm, but businesses this small will usually be investing in equipment, marketing, or production efficiency.As the company grows, they will have to decide how and who will make decisions regarding their investments.Smaller businesses should update their policies and procedures in order to account for their growth. Company Policy No matter what type of set up is created in a company, each company must establish a process for investment decisions.Larger companies have a more complex job because they have more players involved in their company.Companies should establish their process in writing and amend their policy as the company expands.This will eliminate confusion and ensure that only the proper people have a say in investment decisions. When deciding who should have a say in company investments, companies should consider state and federal laws.They should also consider those who are investing in them such as shareholders, board of directors, or venture capitalists.In smaller companies, the owners will have to decide what will be done in the line of investments, but should adjust as their company grows.
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