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What is a Voting Agreement?

Mar 14, 2008
A vote is the voice of an individual making a choice. A vote can be given by ballot or voice. They can be delivered personally by the voter or by proxy. A decision on a submitted question is made by the majority of the votes delivered.

An agreement is an understanding reached by two or parties about their rights and obligations relating to a certain subject or thing. In reaching consent between two or more people regarding the transmission of a property, right or benefit it is necessary to consider the requisites and kind or agreement as well as how the agreement may be annulled.

There are some things that must happen for a legal agreement to be completed. First, there must be a person able to contract and a person able to be contracted with. Next, there must be a thing that is able to be contracted for. There must also be lawful
consideration or quid pro quo. Finally, there need to be assent from the contracting parties.

The actual agreement can either by in writing or under seal. The agreement is executed once two or more persons have made over their rights to a certain thing to one another thereby changing the property therein. An agreement may be conditional or unconditional.

There are a number of ways to nullify an agreement. It is important to note that the agreement is formed from the moment when the parties give their consent, whether it can be proved or not. A simple want of proof does not nullify the agreement.

A voting agreement is usually between an acquiring company and the company being acquired. It is important to develop a voting agreement for all shareholders who are involved in a merger. This is a legal requirement.

It is necessary to identify all involved parties, the shares before the merger and after the merger, as well as granting of the proxy, share transfer, and representations. A voting agreement generally takes approximately thirteen hours to prepare. There are prepared forms available that will significantly reduce that amount of time.

Often confused with a voting agreement, a voting trust is the collection of proxy votes in order to form a group with a unified opinion that can move a specific resolution. It is a trust of actual voting rights that have been entrusted to someone.

Many groups that promote a certain cause or approach will form a voting trust in order to uphold their control and interests. There are forms available for a Voting Trust Agreement that will provide for the issuance of certificates for common stock to be placed in the care of a depositary in the voting trustees name.

Creating a Voting Agreement

Depending on the circumstances, if you are involved in creating or signing a voting agreement, you can follow one of two paths. It is possible to order and download a form from the internet for a Voting Agreement or have a lawyer draw up the form. If the voter agreement is complicated or it deals with major decision.
About the Author
John Siegler is a co-founder and CFO of Practice Technologies, Inc., creator of RealDealDocs.com. RealDealDocs.com gives you insider access to legal documents drafted by top Lawyers in the US. Click here to see an actual voting agreementhttp://www.RealDealDocs.com.
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