Study On Voting Trust From The Perspective Of Financing

The Voting Trust is a system that the corporation and stockholders surrender the voting right to the trustee in the certain period for some purposes, and stockholders retain beneficiary right and other relevant rights. The core of the Voting Trust is to rearrange the corporation management control through allocating voting rights. The Voting Trust provides intrinsic functions, including resolving corporation financial crisis, protecting middle-small shareholder interests, optimizing corporate governance, defensing malicious acquisitions, etc. Meanwhile, the flexibility of the Voting Trust makes it a certain purpose trust, fitting the different value orientations and risk preferences of relevant parties. This article focuses on the Voting Trust set up for the purpose of financing contrasting to the traditional financing methods, and puts forward some suggestions for the establishment of the Voting Trust in the financing practice under our country's current legal system.In addition to the Introduction and the Conclusion, the article includes five parts.The first part——Mechanism of the Voting Trust from the perspective of finance. Stockholders entrust the voting right that separates from the stock right to the investors or someone it designated so as to achieve corporate financing. The Voting Trust makes transaction cost of both parties comparatively reasonable. Either the safety of the investment or the stock right gets guaranteed.The second part——Classical cases of the Voting Trust in the financing practice. This part comparatively analyses some classical cases of the Voting Trust in the financing practice both domestic and abroad. The Brown V. Pacific Mail Boat Corporation established shareholder the Voting Trust under the case law context, and the Howard Hughes Financing epitomizes the financing function of the Voting Trust, and the Qingdao Beer financing is the most representative case of the Voting Trust in China's financing practice.The third part —— Superiority of the Voting Trust in the financing practice. The traditional financing methods including Bank Loans, IPO, and Bond Issuance are still the main approaches of the corporation financing in current economic situation. However, relatively speaking, the Voting Trust could satisfy the financing parties' demands with the superiority of low threshold, simple procedure, efficiency, low cost, high safety, and etc.. This part mainly argues that the Voting Trust can be the important supplement of the traditional financing methods by the comparatively analysis.The forth part——Establishment of the Voting Trust from the perspective of financing. Functions and values of the Voting Trust in the financing practice are justified based on the above discussion, nevertheless, the institutional establishment of the Voting Trust lacks systematic study. This part concentrates on analyzing the institutional establishment of the Voting Trust both in macroscopic and microscopic aspects, including the connection with the current legal system in areas as for the trust purpose, trust object, trust registration, trust period, and etc, endeavors to make some practicable proposals for the establishment of the Voting Trust in the financing practice.The fifth part——Potential risks and preventing mechanisms of the Voting Trust in the financing practice. The Voting Trust goes with institutional risk since its establishment, and thus, preventing mechanisms shall be prepared in advance when it applies to the financing practice. In order to set up the effective Voting Trust, this part discusses the potential risks of the Voting Trust in the financing practice from internal and external corporation aspects, meanwhile, it recommends to evade them through the compulsive regulations or laws and the effective Voting Trust agreement.