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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  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. Do Shareholders Get a Say in a Firm's Operation?

    Stock ownership often provides a vote on board membership and other issues put out for shareholder approval. 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 >>
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