Voting Trust

DEFINITION of '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.

BREAKING DOWN 'Voting Trust'

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.

RELATED TERMS
  1. Voting Right

    The right of a stockholder to vote on matters of corporate policy ...
  2. Voting Trust Agreement

    A contractual agreement detailing the specifics of the voting ...
  3. Cumulative Voting

    The procedure of voting for a company's directors; each shareholder ...
  4. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
  5. Active Trust

    A trust where the trustee is held accountable for additional ...
  6. Contingent Voting Power

    A provision granting voting rights to preferred shareholders ...
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  2. Retirement

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  3. Retirement

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  4. Retirement

    Advanced Estate Planning: Using Trusts

    By Steven Merkel While making a will is one of the most important documents in estate planning, there are typically always a few items, property, or accounts that while they're included in your ...
  5. Personal Finance

    Surprising Uses for Trust Funds

    Here are five common situations where a trust fund makes financial sense.
  6. Your Clients

    Advisors: Tips for When to Employ Living Trusts

    Revocable living trusts accomplish estate planning objectives that aren't possible with a will. Here are some of the cases that show when to use a trust.
  7. Retirement

    Estate Planning: Introduction To Trusts

    by Cathy Pareto, CFP®, AIF® (Contact Author | Biography) A trust is an agreement that describes how assets will be managed and held for the benefit of another person. There are many ...
  8. Personal Finance

    What's a Trust Fund?

    A trust fund is a fund comprised of a variety of assets, established by a grantor, to provide financial security to an individual, most often a child or grandchild - or organizations, such as ...
  9. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  10. Entrepreneurship

    Keeping Control of Your Business After the IPO

    Taking a company public doesn't mean founders must completely give up calling the shots. Before the IPO, consider these tactics to keep control after it.
RELATED FAQS
  1. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
  2. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ... Read Answer >>
  3. How does the trust maker transfer funds into a revocable trust?

    Learn how revocable living trusts are established, how the trust maker transfers funds into the trust, and the advantages ... Read Answer >>
  4. Is there a time limit on collecting on the trust fund?

  5. 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 >>
  6. Do convertible bonds have voting rights?

    Convertible bonds usually have no voting rights until they are converted. Even after conversion, they may not be granted ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center