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voting trust

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Financial Dictionary

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.

Investopedia Commentary

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 Links

Knowing Your Rights As A Shareholder
The Purpose and Importance of Proxy Voting

See also: Cumulative Voting, Proxy, Statutory Voting, Voting Right, Voting Share, Voting Trust Agreement

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Legal Dictionary

Main Entry: voting trust
see TRUST
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.
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