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Simple English definitions for legal terms
shareholder voting agreement
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A quick definition of shareholder voting agreement:
A shareholder voting agreement is a contract between shareholders of a company where they agree to vote their shares together as a unit. This is also known as a pooling agreement or shareholder-control agreement. It ensures that the shareholders vote in a unified manner and can be useful in situations where a particular decision requires a certain percentage of votes to pass.
A more thorough explanation:
A shareholder voting agreement is a contract between shareholders of a corporation that outlines how their shares will be voted. This agreement is also known as a pooling agreement or shareholder-control agreement.
For example, if three shareholders of a company agree to a shareholder voting agreement, they may decide to vote their shares as a unit in order to have more control over the company's decisions. This means that they will all vote the same way on important matters, such as electing board members or approving mergers.
Another example of a shareholder voting agreement is when a group of investors purchase a large portion of a company's shares and agree to vote together in order to influence the company's direction. This can be beneficial for the investors because they can have a greater say in the company's decisions than if they voted individually.
Overall, a shareholder voting agreement is a way for shareholders to work together to have more control over a company's decisions and direction.