Can a company be a trustee of a trust?
Can a company be a trustee of a trust?
There are several parties that make up a trust structure, each serving a different role. The ‘trustee’ is the person who distributes the trust’s assets to the beneficiaries. A trustee can be either a real person, known as an ‘individual trustee’, or a company, known as a ‘corporate trustee’.
Can a trust distribute to a company it owns?
Technically, a trust cannot own shares in a company as it is not a separate legal entity. A trustee can own company shares for the benefit of beneficiaries. For example, if you run your own company, you can set up a trust to hold your shares. If you’re the trustee, you can distribute profits from the trust to yourself.
Can a trustee be an individual?
The trustee of a trust is either an individual person or persons or a company that legally holds title to the trust’s assets for the benefit of the beneficiaries of the trust.
What is difference between trust and trustee?
Living Trust Basics A trust is an entity that is separate from the trustor, or creator of the trust. A trustor may also be called a grantor or a settlor. Trustee: a person or persons designated by a trust document to hold and manage the property in the trust.
Can a company be a trustee for more than one trust?
To get maximum protection if trusts are being used a company should act as trustee for them. By having two trusts, with one operating the business and the other owning the equipment, maximum protection for the assets will not be achieved by only having one company acting as trustee.
How is a company trustee replaced in a trust?
Another way a company trustee is replaced is where the trust deed contains the role of an appointor. The appointor’s role is to appoint and remove trustees. The appointor is the “controlling mind” of the trust. Commonly the appointor is one or two of the directors of the trustee company, for example the husband and wife.
What happens to a trust if the director dies?
The company itself will continue (a company does not die). If there were two or more directors, the remaining director/s of the company can continue to run the family trust. If the deceased was the only director of the trustee company, it can get tricky. Shareholders of the company generally have the power to appoint new directors.
What happens if a trustee company goes into liquidation or?
An issue that has become increasingly common in recent years (particularly following the GFC) is that where a trustee company goes into liquidation or has been deregistered. This can become quite a complex issue to resolve, particularly when the trust owns real property, or when the trust is a self managed superannuation fund.
Who are the directors of a corporate trustee?
Like any other company, the corporate trustee has shareholders and directors. Ultimately, it is the directors of the corporate trustee who control the trustee (the company) and consequently control the distributions of the trust. There are many benefits of having a corporate trustee. Some of these advantages include: