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.

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RELATED FAQS
  1. What can shareholders vote on?

    Understand the usual voting rights of common stock shareholders, along with the importance of shareholders exercising their ... Read Answer >>
  2. If I own a stock in a company, do I get a say in the company's operations?

    You don't get a direct say in a company's day-to-day operations, but, depending on whether you own voting or non-voting stock, ... Read Answer >>
  3. How do you get a hard copy of a stock certificate?

    Before online brokers and personally-directed accounts, holding a physical stock certificate was a necessity, as this was ... Read Answer >>
  4. What rights do all common shareholders have?

    Learn what rights all common shareholders have, and understand the remedies that can be taken if those rights are violated ... Read Answer >>
  5. I lost my share certificate. Do I still own the stock?

    Regardless of whether a shareholder loses his or her stock certificate, that person still owns the shares. However, in order ... Read Answer >>
  6. What happens to the voting rights on shares when the shares are used in a short sale ...

    The registered owner of the security, known as the holder of record, is the investor who retains voting rights. This means ... Read Answer >>
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