Statutory Voting
What Is Statutory Voting?
Statutory voting is a corporate voting system where each shareholder is qualified for one vote for every share and votes must be partitioned equally among the competitors or issues being voted on. Statutory voting, some of the time known as straight voting, is one of two stockholder voting procedures and the more normal option.
Statutory and cumulative voting are the two procedures for permitting shareholders to vote on issues or board members, with statutory being the more normal of the two.
How Statutory Voting Works
In statutory voting, on the off chance that you owned 50 shares and were voting on six board of director positions, you could project 50 votes for each board member, for a total of 300 votes. You were unable to project 20 votes for every one of five board members and 200 for the 6th.
Statutory voting is a voting system that expects that the votes are partitioned equitably among the up-and-comers or issues being voted on and each share procures one vote. There are alternate approaches to voting.
Statutory Voting versus Cumulative Voting
The other voting methodology is cumulative voting, which allows shareholders to weight their votes toward specific competitors and further develops minority shareholders' chances of impacting voting results. In cumulative voting, you are permitted to excessively vote. Assuming you own 50 shares and are voting on six board positions, you can project 300 votes for one director and none for the five different directors, 20 votes for every one of five board members and 200 for the 6th, or quite a few different blends.
To see if a company utilizes statutory voting or cumulative voting, counsel its shareholders' agreement.
Features
- Cumulative voting further develops a minority shareholder's chance of impacting a vote.
- The other shareholder voting strategy is cumulative voting, which permits votes to be weighted in light of the shareholder's preference.
- Statutory voting, otherwise called straight voting, means that shareholders have one vote for each share and that votes must be equitably split between issues.
