A Delaware Voting Trust Certificate is a legal document that represents an agreement between the shareholders or owners of a corporation, known as beneficiaries, and a designated trustee. This certificate grants the trustee the authority to exercise voting rights on behalf of the shareholders for a specific period or until certain conditions are met. The purpose of a Delaware Voting Trust Certificate is to consolidate the voting power of the shareholders under the trustee's control. It is often utilized in situations where shareholders want to consolidate their voting power to achieve a unified decision-making process or to protect their interests in a potentially contentious situation. The trustee, who is typically an individual or a trusted entity, holds legal ownership over the shares during the duration specified in the certificate. However, the trustee does not obtain any beneficial interest or ownership of the shares. Instead, they act as the agent of the shareholders and are bound to exercise their voting rights solely in accordance with the terms outlined in the trust agreement. There are various types of Delaware Voting Trust Certificates, each catering to specific needs or circumstances: 1. Temporary Voting Trust Certificate: This type of certificate is utilized for a specified period, usually during transitions such as mergers, acquisitions, or corporate restructuring. It allows shareholders to pool their voting rights temporarily to achieve a common goal or desired outcome. 2. Permanent Voting Trust Certificate: In contrast to the temporary trust, a permanent voting trust is established for a longer duration, often without a specified termination date. It enables shareholders to maintain a unified voice in the company's decision-making processes over an extended period. 3. Voting Trust Certificate for Controlling Interests: This type of certificate is employed when majority shareholders seek to consolidate their voting power to maintain control over the corporation. By pooling their shares, they can protect their interests and ensure a coherent approach to running the company. 4. Voting Trust Certificate for Proxy Solicitation: This type of trust certificate is used when shareholders need assistance in gathering proxies for annual meetings or other voting events. The trustee, through the trust agreement, is authorized to gather and vote these proxies on the beneficiaries' behalf. In conclusion, a Delaware Voting Trust Certificate is a legally binding document that empowers a designated trustee to exercise voting rights on behalf of shareholders for a specific duration or under certain conditions. It helps shareholders consolidate voting power, achieve collective decision-making, or protect their interests. The different types of Delaware Voting Trust Certificates include temporary, permanent, controlling interests, and proxy solicitation trusts, each serving specific shareholder needs.
Delaware Voting Trust Certificate
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(a) Subject to subsection (f) of this section, no defective corporate act or putative stock shall be void or voidable solely as a result of a failure of authorization if ratified as provided in this section or validated by the Court of Chancery in a proceeding brought under § 205 of this title.
Section 203 is an antitakeover statute in Delaware which provides that if a person or entity (an ?interested stockholder?) acquires 15% or more of the voting stock of a Delaware corporation (the ?target?) without prior approval of the target's board, then the interested stockholder may not engage in a business ...
Companies do not have to issue these certificates automatically but are legally required to issue a certificate when requested. While stock certificates are mostly symbolic, they can be valuable to investors that want physical proof that they own stock.
Voting trusts are often formed by company directors, but sometimes a group of shareholders will form one to exercise some control over the corporation. It can also be used to resolve conflicts of interest, increase shareholders' voting power, or ward off a hostile takeover.
The shares of a corporation shall be represented by certificates, provided that the board of directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares.
What is a Voting Trust? A voting trust is an arrangement where the voting rights of shareholders are transferred to a trustee for a specified period. The shareholders are then awarded trust certificates that provide evidence that they are beneficiaries of the trust.
Issuing Shares for Delaware Corporation. In a general Delaware corporation, you can easily issue shares to outsiders of the company in exchange for funding. A corporation gets a list of authorized stock when the company is incorporated, from which you can then issue the shares from.
(1) The term ?security? means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, ...