What is a capital expenditure and why would I want to have shareholder approval to buy or dispose of them?
A capital expenditure is money spent to acquire or upgrade physical assets such as buildings and machinery. Requiring shareholder approval of large capital expenditures protects the shareholders from the Corporation’s employees or Officers putting too great of an investment into certain ventures without the shareholders’ approval. It protects the shareholders’ investment from the poor judgment of an Officer or employee. The amount of the limit will be dependent upon the size and resources of the Corporation as well as the shareholders’ confidence in its management.
