Corporate trustee business structure

What is a corporate trustee? Can a corporate trustee be a family trustee? There are many benefits to using a corporate trustee structure : Your assets have greater protection whereas the personal assets of individual trustees are at risk. Recording and registering ownership of assets is simpler, particularly if you want to change membership in future.

A corporate trustee structure is one option for managing assets.

In this simple guide, we show you how to establish a corporate trustee so you can maximise your asset management. The prime responsibility is that of a prudential supervisor. Issuers of securities to members of the public are bound by a trust deed and require a supervisor by law. Trusts are often set up by one family member, such as a parent, to take care of other family members, typically children.

The trust doesn’t last forever: As per the rule against perpetuities, the trust structure will cease to exist after years (different rules apply in South Australia). Generally, corporate trustees are shell corporations with no, or minimal , assets. The trustee is personally liable for the trust’s liabilities.

Therefore, it is common for trusts to have corporate trustees to limit the trustees’ liabilities to the assets of the corporation. Because of this, often, this business structure is more tax effective. The company is a registered company, much like any other company, but it is often incorporated with the sole purpose of acting as trustee.

This means that the company will not conduct business. Like any other company, the corporate trustee has shareholders and directors. However, if there is a shortfall the trustee is responsible for the difference. There are three key steps: A qualifying EOT will be established with a corporate as the trustee of the EOT (the Trustee Company ). A trust is not a separate legal entity.

The shareholders sell their shares to the Trustee Company under a share purchase agreement. If a charity structure is a corporate body, generally its trustees aren’t personally liable for what it does. If your charity isn’t a corporate body (‘unincorporated’): the trustees are personally.

The Directors are the day-to-day managers. However, the Shareholder has the power of appointment of the Directors and must approve major transactions. This is the independence necessary to prove independence.

The beneficiary may be the owner of that property or may be a person for whom the owner wants to provide.

This makes the Discretionary Trust (with a corporate trustee ) a strong and flexible option for a family business. The family members are protected from business risk and the trustee has the discretion to distribute the income in the most effective way possible. This is because a company can continue operating with just one director, but you need a minimum of two trustees under an individual trustee structure. The advantage of a trust company structure is that it allows an entity to legally conduct business for another entity. That entity can be another organization or an individual.

Naturally, their fees are higher than what a person, especially a family member, might charge. Corporate Trustees have legal responsibilities and important roles to play in managing a trust. When employing an incorporated trustee , the company is a trustee and members of the trust are the directors. Such a structure makes it easier to remove or add directors.

Some more advantages of. In the UK there are four popular types of business structure. This type of business structure is formed when a gift or settlement is made to a trustee (a person or a company) on behalf of a yet-to-be-formed trust.