If I win the lottery can I hire people to run a corporate busines

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Lotto-vm User 1:

Yes.

Usually this is called ‘buying shares’. You buy up stock in a company and the board of directors, elected by the shareholders, hire executive officers who hire managers, who hire staff, that run the company for the benefit of the shareholders. The shareholders often have no idea at all about how to run the company themselves.



Lotto-vm User 2:

Depending on how much you won in the lottery, you could do almost anything. One of them being hiring people to run a corporate business.

You’d want to know a little about corporate business though or at least learn fast if you’re hiring people to run it.

Corporate business involves the company being a complete separate legal entity headed by a board of directors as well as a CEO and other top-tier management positions. Usually companies like this don’t just start of this way but grow large enough to have to be operated in this manner (as a corporation).

This kind of business involves many moving parts and are often listed on stock exchanges to raise capital. You kind of have to know what you’re doing or have a lot of faith and trust in the people that run it because things could go south quick if they don’t have the companies best interest at heart.

A problem known as the agency problem involves a conflict of interest between principals and agents ie. owners/shareholders (you) and managers (people hired to run company). Put simply as these two parties are incentivized by different motivators they’ll do things that put the other at a disadvantage.

For example, managers may be incentivized by bonuses through profit targets. If they’re making big profits by simply selling assets or not replacing inventory, this would yield big profits in the short-term (and the manager gets their bonues) but negatively affect the company in the long term and hurt shareholders.

So to answer your question, you can but you’d have to either know corporate business or have compete and utmost faith in the people you hired. Otherwise, you’re probably best finding other investment opportunities or planning a nice holiday!

I’ve approached this question from one angle but Steve Waddington is absolutely on the mark as well. By buying shares you are essentially becoming an owner through stock and managers are working for your company, hence working for you.

Hope this helps!

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