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Simple English definitions for legal terms
noncumulative voting
Read a random definition: forma verborum
A quick definition of noncumulative voting:
Noncumulative voting is a way of voting where each shareholder can only vote for one candidate in a board election, even if they own multiple shares. This means that the majority shareholder will have more power to elect the entire board of directors. It is also called straight voting.
A more thorough explanation:
Definition: Noncumulative voting is a corporate voting system where a shareholder can only vote for one candidate in a board election, and the number of votes they can cast is limited to the number of shares they own.
Example: If a shareholder owns 100 shares in a company, they can only vote for one candidate in a board election, even if there are multiple seats available. This means that a majority shareholder can elect the entire board of directors.
This example illustrates how noncumulative voting can give more power to majority shareholders and limit the influence of minority shareholders in corporate decision-making.