Because a company`s senior management and board of directors (BOD) manage its day-to-day operations, shareholders have the right to vote on fundamental business or management issues. However, shareholders can vote on important corporate issues, such as. B Charter amendments or the vote of board members or board members. Although common shareholders generally have one vote per share, preferred share owners often have no voting rights. Voting confidence must be understood as a group of shareholders who agrees to delegate the voting rights of its shares to a third party known as the trustee of the voting trust. Voting Trusts are written agreements in which shareholders transfer their shares to a trust in exchange for interest on the trust`s income. Typically, a group of shareholders transfers their shares to the Trust in exchange for a share in the trust`s income, proportional to the number of shares in each transfer. As its interest in the trust is proportional to the interest of its shares, the financial share of each party (i.e. the amount each shareholder receives from dividends) remains unchanged. The agent is entitled to choose the shares and distribute the trust`s proceeds.
Often, the agent also receives instructions on how to choose the trust`s shares. For example, the agent may be responsible for « choosing the shares of the trust for the benefit of a member of the Smith family to become a director of the business if at least one member of the Smith family tries to become a director. » In general, the trust`s only proceeds are dividends paid to the shares. In accordance with Section 7.30 of the RMBCA, five elements must be put in place for an agent to be effective: they also qualify the rights of shareholders, such as the . B continued receipt of dividends; merger procedures, such as the consolidation or dissolution of the company; and the obligations and rights of agents, such as. B for votes. For some voting trusts, additional powers may also be granted to the agent, such as the freedom to sell or exchange the shares. The voting agreement is an agreement or plan under which two or more shareholders pool their voting shares for a common purpose. It is also known as the pooling arrangement.