Legal Characteristics and Consequences of Voting Trusts

Quite frequently it becomes desirable for corporate stockholders to combine the voting power of their stock for a common purpose. The device usually employed to achieve that objective is the voting trust. Under the conventional voting trust arrangement, two or more stockholders transfer the legal title to their stock to a common trustee, who causes new certificates to be issued in his name. The voting trustee then issues voting trust certificates to the beneficial owners of the stock.

The terms under which the stock is held in trust are defined by a written voting trust agreement.