Voting Agreements

Voting agreement: an agreement or plan under which two or more shareholders pool their voting shares for a common purpose. It is also called pooling arrangement. B. Unless otherwise provided in the voting agreement, a voting agreement established in this section shall be explicitly applicable».; [A.R.S. § 10-731] the agreement should be prominently marked on the certificate; Otherwise, the agreement will not be applicable to a valuable buyer who will purchase the shares without knowledge of the agreement. However, a person who receives the stock by gift or succession is bound by the agreement as soon as he becomes aware of it. It is important to note that these voting agreements are only valid between shareholders with respect to shareholder votes. They are illegal between directors and should not be used by shareholders to restrict the exercise of directors` discretion. Such agreements may also be unenforceable if they constitute a mere purchase of votes. Shareholders have a basic voting right that cannot be compromised or violated by the company or the controllers. However, the law allows a shareholder to restrict or modify his voting rights by an agreement. Voting rights agreements may also include granting power to another party to effectively exercise the vote. This agreement is somewhere between the Voting Trust and the Voting Agreement – the shareholder remains the shareholder or the record, but the voting rights are transferred to another.

Section 21.367 of the Code provides that a shareholder may vote to another person, either in person or by written proxy. A power of attorney is only valid for 11 months, unless otherwise provided in the instrument. An agent is not irrevocable unless the proxy form strikingly states that it is irrevocable and (2) that the proxy is «bearer of an interest», which means that the reason the proxy has the right to vote is not only the transfer of voting power, but that the proxy has an interest in the shares, for example.B. who holds the shares as security and has the right to vote the shares by an agent until the debt exists. Paid. A voting contract is defined by a national statute as follows: a shareholder may transfer his voting rights to another person through a voting exchange contract. A voting trust is created by a written trust agreement where by which the original shareholder transfers his shares to an agent held to his benefits. The purpose of these agreements is to control the voting of the shares and to authorize the proxy to vote on the shares. The original shareholder retains an economic interest in the share and, as a general rule, the trust agreement requires that all dividends and distributions be paid to the equitable owners. Voting trust agreements may require the agent to vote in a certain way on certain matters. Section 6.251 of the Business Organizations Code provides that voting trusts may be used to secure a majority block by combining the strength of votes of several minority shareholders.

It can also be used by minority shareholders to increase the power of their representation. Sometimes the Voting Trust can be an instrument of oppression in which a controlling shareholder convinces other minority shareholders to grant them the power of their votes (typically shareholders who are not involved in the transaction or are very interested, such as children or grandchildren who inherited their shares in the company) and then uses that power to vote their shares against their best interests…

Sobre el Autor: Luis