At the end of the trust period, the shares are usually returned to the shareholders, although in practice many voting trusts provide that they are returned to the voting trusts, with identical conditions. Voting trust agreements are usually operated by the current directors of a company as a counter-measure to hostile acquisitions. However, they can also be used to represent a person or group trying to take control of a company – for example. B creditors of the company who might want to reorganize a bankrupt company. Voting trusts are more common in small businesses because they are easier to manage. Voting trusts are similar to proxy voting in the sense that shareholders designate another person to vote for them. But voting trusts work differently than a proxy. While the proxy can be a temporary or one-time agreement often created for a specific vote, the voting trust is generally more permanent to give a block of voters more power than a group – or even control of the business, which is not necessarily the case with proxy voting. The details of a voting trust agreement, including the duration of its term and specific rights, will be set out in a filing with the SEC. They also describe shareholder rights, such as.B.
the continued receipt of dividends; merger procedures, such as consolidation or dissolution of the company; and the duties and rights of trustees, by .B. for which votes are used. In some voting trusts, the trustee may also be granted additional powers, such as the freedom to sell or redeem the shares. A voting trust agreement is a contractual arrangement in which voting shareholders transfer their shares to a trustee in exchange for a voting trust certificate. This gives voting trustees temporary control of the company. Voting trust agreements, which must be filed with the Securities and Exchange Commission (SEC), determine the duration of the agreement, typically for several years or until a specific event occurs. .