voting trust

voting trust
Simply stated, a device whereby persons owning stock with voting powers divorce the voting rights thereof from the ownership, retaining the latter to all intents and purposes and transferring the former to trustees in whom the voting rights of all depositors in the trust are pooled. Smith v Biggs Boiler Works Co. 33 Del Ch 183, 91 A2d 193, 34 ALR2d 1125. A trust created by an agreement between a group of the stockholders of a corporation and the trustee or by a group of identical agreements between individual stockholders and a common trustee, whereby it is provided that for a term of years, or for a period contingent upon a certain event, or until the agreement is terminated, control over the stock owned by such stockholders, either for certain purposes or for all purposes, is to be lodged in the trustee, either with or without a reservation to the owners, or persons designated by them, of the power to direct how such control shall be used. Annotation: 98 ALR2d 379, § 1[d]; 19 Am J2d Corp § 685. The term generally contemplates the transfer of corporate stock to trustees, the issuance of new stock certificates to trustees, and the issuance by them of trust certificates to the beneficial owners of the stock, with the right to vote in the trustees and the right to receive dividends in the trust certificate holders. Anno: 105 ALR 124.

Ballentine's law dictionary. . 1998.

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