Voting trust

Purposes

• Several shareholders may wish to create a unified block of votes, which together gives them more power than the collective sum of their fragmented interests.
• In many countries, in order to call general meetings, shareholders need to hold a certain percentage of the issued shares of the company. By aggregating their shares, the shareholders can confer this power on themselves collectively where they might not have it individually.
• Locking shares up in voting trusts can in some countries help deter a hostile takeover.
• Voting trusts are also sometimes used to resolve conflicts of interest. By putting the shares in a trustee who can vote them at arm's length from the beneficiary of the trust, this can in some circumstances mitigate or absolve the original shareholder from what might otherwise constitute a conflict of interest.
• Shares are sometimes aggregated into a voting trust to facilitate a corporate reorganisation.
• Promoters of companies sometimes aggregate their shares in a voting trust to safeguard control of the company.

  Sample