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If you ask me for money for something...

Do I have the right to say, but you have to use the money for this? If I am the major investor in your business do I have the right to make suggestions/demands on the direction of the company?

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Fiveofakind2

Asked by Fiveofakind2 at 12:44 PM on Apr. 3, 2009 in Politics & Current Events

Level 3 (19 Credits)
Answers (12)
  • Yes, if you buy stock in a company you are buying ownership of that company. Also, you can put restrictions on loans, if a bank gives you a mortgage you are not allowed to spend the money on a 'round the world trip, you have to use it for a house. Same with a car loan.
    stacymomof2

    Answer by stacymomof2 at 12:52 PM on Apr. 3, 2009

  • But what if it isn't stock, what if the CEO comes to me and wants to borrow cash? Does that give me more or less of a right to say, or the same as a stock holder?
    Fiveofakind2

    Answer by Fiveofakind2 at 1:00 PM on Apr. 3, 2009

  • Stockholders get to vote for the board of directors. You also get some decision making depending upon the issue and how much stock you own. You have the option of not "investing" if you choose.

    If someone wants to borrow money from me I want to know what it is for. That is my right and honestly my obligation to myself.
    yourspecialkid

    Answer by yourspecialkid at 1:06 PM on Apr. 3, 2009

  • But what do YOU do if they don't use it the way they should?
    Fiveofakind2

    Answer by Fiveofakind2 at 1:07 PM on Apr. 3, 2009

  • Just because you loan the money, doesn't give you rights. You buy stock or are issued stock certificates by the corp. in the amount of the loan to become a stockholder and have voting rights. The CEO and Board of Directors make the decisions for the corporation. Only certain things about the corporation require the stockholders to vote. So loaning money doesn't mean you get to dictate to the corporation what they do with it. Now, if you are a financial institution and corporation is going to borrow money, of course the financial institution is going to require some kind of prospectus as to what the money is for, like adding equipment or retooling.
    Msaural

    Answer by Msaural at 1:24 PM on Apr. 3, 2009

  • If you are talking more or less in connection with the Gov. loaning money to corporations like GM, they were loaned the money with only a general plan as to what it was going to be used for, but the Gov. gave GM a deadline to report what they did with the money and how it was used. So, instead of finding out beforehand an approving the use, they pretty much said here is the money and you tell us what you did with it by X date. Same thing happened with AGI and by the time the Gov. received the information about how the money was spent, the bonuses had been paid out and thus the crap hit the fan and the citizens were outraged.
    Msaural

    Answer by Msaural at 1:25 PM on Apr. 3, 2009

  • Oh, another thing is that in a lot of corporations, the Board of Directors, being the President, Vice President, Teasurer and Secretary, these people could also be the sole shareholders in the Corporation. There is a difference between private and public corporations. Private corporations hold there own stock and have not offered stock to the public for sale in order to acquire funds, while public stocks would be those that are traded on the open market. So, if a CEO came to you and asked you for a loan, and you gave him the money without securing that loan with stocks, but merely a promissory note to repay it, you would not be able to dictate how that money was to be used.
    Msaural

    Answer by Msaural at 1:32 PM on Apr. 3, 2009

  • But what if it isn't stock, what if the CEO comes to me and wants to borrow cash? Does that give me more or less of a right to say, or the same as a stock holder?
    _______________________________________
    Depends on the terms of the loan, I guess. The person loaning the money does have the right to dictate what it is used for, the other option is to not take the loan. It happens all the time.
    stacymomof2

    Answer by stacymomof2 at 1:35 PM on Apr. 3, 2009

  • So, my husband and I are arguing this. He, the republican, feels that Obama should have removed the CEO and that any bank that accepted tarp money should be held to the administration rules, otherwise, give the money back.

    I, the democrat, feel that If I request a loan and you approve that loan, and it is essentially a loan to "do business" than you do not have a say in how I choose to do business, because you already said you must have agreed because you gave me the money.
    Fiveofakind2

    Answer by Fiveofakind2 at 2:02 PM on Apr. 3, 2009

  • Many banks that received TARP money didn't even ask for it because their bank was not insolvent, but the Gov. forced the banks to take the money anyway. This is not about saving banks in trouble its a means for the central bank (the Federal Reserve) to acquire the assets of the banks regardless of whether or not they are in trouble, basically this is a means to "nationalize" the banks and have the Federal Reserve control them and dictate how the will do business.
    Anonymous

    Answer by Anonymous at 2:45 PM on Apr. 3, 2009

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