| Shareholders' voting right is a significantly powerful system of control. The exercising of voting right is of great importance to shareholders' right. However in our country, legal research on such area is not so much as expected. And most of these existing publications on shareholders' voting right is mostly limited on "Proxy "and "Cumulative Voting". Seldom on voting trust is done domestically. Based on studying large amount of foreign materials, the author intend to do some research on this subject.The system of "voting trust" originates from American corporate law. Voting trust is set up by two or more shareholders. For a fixed period, they irrevocably transfer the legal title to their stock to one or more voting trustees in exchange for voting trust certificates for a like number of shares, which are issued by voting trustees in their name. Then the voting trustees hold legal title of such shares and may vote the shares in accordance with the terms of the trust instrument. On the other hand, the certificate holders, as the beneficiaries of the voting trust, have a right to all dividends received by the trustees. The voting trust certificates may be freely transferred in the securities market .Different from proxy or shareholders' voting agreement, voting trust is developed from the law of trust. It has the feature of a trust. So it follows all the principles of trust law, such as the co-existence of legal title and equitable title on the depositing shares as trust property, the independence of as trust property, the successive management of trust property and limited liability. And all of that bring the unparalleled advantages to voting trust.The significance of voting trusts is to place the control of a corporation in the hands of a given group of men. As we all know, the power of control originates from the amount of the voting shares. Theoretically speaking, the control of a corporation is owned by all shareholders. Through exercising the voting right in the shareholders' meetings, shareholders can realize the control to corporation. But actually in modern corporations, the severe decentralization of shares weakens the shareholders' power of control. So the author believe voting trust is the ideal device to centralize the power of control.American counts denied the validity of voting trust at the very beginning. As the growing of the economy and the maturatity of securities market, the system of voting trust is gradually accepted by American counts. And then statutes follow. Variousfunctions of voting trust have been affirmed largely, such as stabilizing the management of a corporation, smoothing the course of reorganization, preventing against the hostile take-over and improving corporate governance.During the course of the settling of voting trust, the trust instrument shall be subscribed by parties. Because there is a complete separation of legal title and beneficial interest, the trust instrument must be carefully drafted to cover all likely contingencies. If there is no expression on some matter, the parties may act in accordance of the law of trust In the convenience for the inspection by the certificate holders and other shareholders, disclosure of the trust instrument is provided by most statutes.The parties to a voting trust mainly are settlers, trustee(s) and beneficiaries. Trustees bear fiduciary duties to beneficiaries. Fiduciary duties mainly include duty of care and duty of loyalty. The shareholders, as settlers, have a right to limit the trustees discretion in voting action by trust instrument. The certificate holders, as beneficiaries have a right to all dividends from the depositing shares. Both settlers and beneficiaries have the right to supervise the trustees' performance according the voting instrument. In most cases, settlers and beneficiaries are the same persons.The system of voting trust is of great significance to the economy of China. In our country, the phenomena of "insider control" and "sole shareholder" are common in list com... |
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