Trusts in commercial settings

Although the common law trust has historically been used as a vehicle to hold property for successive generations within a family, it has also long been a feature in many kinds of commercial arrangements.

What is a trust?

A basic definition is a legal arrangement which involves a person (the ‘settlor’) transferring legal title to assets to another person or body (the ‘trustee’) to hold for the benefit of one or more persons (the ‘beneficiaries’), which may include the settlor. The terms of the trust are usually set out in a written instrument, often in the form of a deed. The trust imposes onerous duties on the trustee; failure to fulfil those duties properly may result in the trustee being held personally liable. It is important to note that the trust itself does not have any legal personality; rather, it is the trustee who is the principal actor and carries out the purposes of the trust in his own name.

For more information, see Practice Note: An introduction to trusts for commercial lawyers.

It is important to note that the trust has certain unique characteristics

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