X entered into a voting trust agreement with Y whereby X transferred the legal title of all his shares to Y.

• A. X is qualified to run for a seat in the board of directors.
• B. X has the right to collect the dividends.
• C. X and Y have the right to inspect corporate books.
• D. X and Y have the right to vote in the election of the board of directors.

Answer: (C)

In a voting trust, the owner gives legal title to a trustee to handle voting, while the owner retains the economic and informational interests in the shares. Because both the trustee (the legal owner who votes) and the beneficiary (the person who keeps the economic benefits and is the actual owner in substance) have a stake in how the company is governed, both are typically entitled to inspect the corporation’s books. This helps ensure the trust is administered properly and the beneficiary’s interests are protected.

The other ideas don’t fit as neatly. Being in a voting trust doesn’t automatically grant the right to run for a board seat; eligibility to stand for election is governed by corporate by-laws and election rules, not merely by a voting-trust arrangement. The right to collect dividends often remains with the beneficiary as the economic owner, but the question focuses on inspection rights. And the trustee votes the shares on behalf of the trust, so both parties having a right to vote in board elections isn’t accurate.