Proxy Irrevocable Template

In plain language: Identifies the grantor (shareholder) and proxy holder by full legal name and entity type, and explains the transaction or interest that justifies making the proxy irrevocable.

Common mistake: Describing the grantor's interest in general terms rather than referencing the specific underlying agreement — if the interest is not clearly stated, courts may find the proxy is revocable at will.

In plain language: Precisely identifies the shares covered — class, certificate numbers, number of shares — and lists every action the proxy holder is authorized to take, including voting, consenting, and executing written resolutions.

Common mistake: Granting authority over 'all shares' without specifying the class or certificate numbers. If the grantor holds multiple share classes, an ambiguous description can extend the proxy beyond the intended scope.

In plain language: Expressly states that the proxy is irrevocable and cannot be withdrawn by the grantor, and anchors irrevocability to the specific interest — loan, pledge, or contractual right — held by the proxy holder.

Common mistake: Stating 'this proxy is irrevocable' without identifying the specific interest that supports irrevocability. A bare declaration of irrevocability, unsupported by a coupled interest, may be set aside by a court.

In plain language: Sets the period during which the proxy is effective and identifies the specific events — loan repayment, closing of a transaction, or expiry of a defined term — that automatically terminate it.

Common mistake: Using an open-ended duration with no termination trigger. Without a defined end, the proxy may persist indefinitely even after the underlying interest has been extinguished, creating a future governance dispute.

In plain language: The grantor confirms they have full legal authority to grant the proxy, that the shares are free of conflicting encumbrances or prior proxies, and that the grant does not violate any other agreement.

Common mistake: Omitting a representation that no conflicting proxy exists. If the grantor has previously granted a revocable proxy to another party covering the same shares, the irrevocable proxy holder may face a competing claim at a critical vote.

In plain language: States whether the proxy holder may appoint a substitute or sub-agent to exercise the proxy, and any conditions on doing so.

Common mistake: Allowing unlimited substitution without a notification requirement to the company's corporate secretary. Substitutions that are not recorded with the company can result in the company refusing to recognize the substitute's votes.

In plain language: Clarifies whether the proxy holder may vote in their sole discretion or must follow specific instructions, and what happens when no instruction has been given.

Common mistake: Granting sole discretion without any carve-out for fundamental transactions — such as a merger or dissolution — that materially affect the grantor's economic interest beyond the scope of the original deal.

In plain language: Addresses whether the proxy survives the grantor's death or legal incapacity, and whether a transferee of the shares takes subject to the proxy.

Common mistake: Failing to address share transfers at all. If the grantor sells or transfers the shares, an acquirer who is not on notice of the proxy may claim they take free of it, undermining the proxy holder's position.

In plain language: Specifies which jurisdiction's law governs the proxy and how disputes are resolved — arbitration, mediation, or litigation in a named court.

Common mistake: Choosing a governing law that differs from the jurisdiction where the company is incorporated. Corporate law of the place of incorporation — not a contractually chosen foreign law — typically governs the validity and scope of shareholder voting rights.

An irrevocable proxy is a legal document in which a shareholder permanently delegates voting authority over their shares to another person or entity, with no right to cancel or withdraw that authority. For a proxy to be legally irrevocable in most jurisdictions, it must be coupled with an interest — meaning the proxy holder has a direct financial or property stake in the shares themselves, such as a security interest under a loan agreement. A bare declaration of irrevocability without a coupled interest is generally unenforceable.

A proxy is coupled with an interest when the proxy holder has a direct stake in the subject matter of the proxy — not merely an interest in voting the shares. Classic examples include a lender who holds pledged shares as loan security, a buyer who has contracted to purchase the shares, or an investor whose rights under a shareholders agreement depend on maintaining voting control. This interest is what justifies stripping the grantor of the right to revoke, and courts examine it closely before enforcing irrevocability.

The duration depends on the terms set in the proxy document and the underlying transaction. Irrevocable proxies typically terminate on a specific triggering event — full repayment of a secured loan, closing of a share sale, or expiry of a shareholder agreement — rather than on a fixed date alone. Most well-drafted proxies also include a long-stop date as a fallback. In several US states, there are statutory maximum durations for irrevocable proxies, typically ranging from 11 months to the life of the agreement creating the coupled interest.

Yes, in certain circumstances. Courts will scrutinize whether a genuine coupled interest exists at the time of execution, whether the proxy was granted under duress or without informed consent, and whether the scope of authority exceeds what is reasonable for the underlying transaction. In some jurisdictions, a proxy that is unconscionably broad — for example, granting discretion to vote the shares into a merger that wipes out the grantor's equity — may be set aside or limited by a court even if technically validly executed.

An irrevocable proxy is specifically limited to voting and corporate governance rights — it authorizes the proxy holder to vote shares at shareholder meetings and execute written consents. A power of attorney is a broader instrument that can authorize the attorney-in-fact to sign contracts, manage assets, open bank accounts, and take a wide range of legal and financial actions on the grantor's behalf. Where only voting authority is needed, a proxy is simpler and more targeted; where broader corporate authority is required, a power of attorney is more appropriate.

No. A voting trust requires shareholders to transfer legal title of their shares to a trustee, who then holds the shares and votes them according to a trust agreement for a defined period. An irrevocable proxy leaves legal and beneficial title with the grantor and simply delegates voting authority. Voting trusts are more complex to establish and administer but provide stronger structural control, particularly for long-term arrangements involving multiple shareholders. Irrevocable proxies are simpler and more commonly used in financing and acquisition transactions.

In most jurisdictions, a standard proxy is automatically revoked on the death or incapacity of the grantor. An irrevocable proxy, however, can be drafted to expressly survive the grantor's death and bind their heirs, executors, and legal representatives — provided it is genuinely coupled with an interest. Without this express provision, the proxy holder's authority is at risk the moment the grantor dies, which is particularly problematic in a live transaction.

Given the enforceability risks — particularly around the coupled interest requirement, choice of governing law, and jurisdictional variations in corporate statutes — legal review is strongly recommended. A high-quality template handles the structural framework, but the specific language linking the proxy to the underlying transaction must be tailored to the deal. For any proxy that will be exercised in a material corporate vote or that secures a significant financing, the cost of a 1–2 hour lawyer review ($300–$600) is minor compared to the cost of a proxy that fails at the moment it is needed.

Most US states follow the Model Business Corporation Act (MBCA) or their own corporate statutes, which permit irrevocable proxies when coupled with a recognized interest. Delaware General Corporation Law Section 212 is the most widely referenced provision and permits irrevocable proxies when coupled with an interest sufficient to support the irrevocability. California Corporations Code Section 705 also recognizes them but imposes specific requirements on the stated basis for irrevocability. State law, not the proxy document's chosen governing law, controls validity for the corporate acts being authorized.