Voting Trust Certificate


DEFINITION of 'Voting Trust Certificate'

A certificate issued by the limited-life trust of a corporation established to limit the control of a corporation to a few individuals. A voting trust certificate is issued to a stockholder in exchange for their common stock, and represents all of the normal rights of a shareholder except the right to vote. The life of a voting trust certificate is usually limited to five years, at which point the common stock, with voting rights, is returned to the shareholder.

BREAKING DOWN 'Voting Trust Certificate'

A voting trust certificate allows a few individuals, known as voting trustees, to gain control and make decisions regarding the corporation without interference. The purpose is typically to allow reorganization when a corporation is in financial turmoil.

  1. Reorganization

    A process designed to revive a financially troubled or bankrupt ...
  2. Shareholder

    Any person, company or other institution that owns at least one ...
  3. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  4. Corporation

    A legal entity that is separate and distinct from its owners. ...
  5. Restructuring

    A significant modification made to the debt, operations or structure ...
  6. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
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