Voting Trust

Voting Trust

A legal trust created to combine the voting power of shareholders. With the establishment of the voting trust, the shareholders' legal title (their stock) and voting rights are transferred to a designated trustee for a set duration.

Notes:

There are many reasons stockholders may wish to form these trusts. For example, they may create one in the hopes of maintaining control within a corporation through a unified vote. Or they may want to use it as a form of protection from corporate creditors. The laws of different states usually have limitations on the duration of a trust, as it is a legally binding agreement.

See also: Cumulative Voting, Proxy, Statutory Voting, Voting Right, Voting Share, Voting Trust Agreement