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.

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RELATED FAQS
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    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. 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 >>
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