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The names of trusts are nothing more than “nick names”. Eg you could have the McScrooge Unit Trust. It doesn’t make any difference to anyone. People often call a Unit Trust after their surname or even after what they do. E.g. The Brick Layers of New York Unit Trust. You can’t register a Unit Trust name anywhere.
You can of course (and you should register) a business name. If the Unit Trust is trading under its Unit Trust name then it is also a business name and should be registered.
Another idea is to call the partnership after the names of the unit holders. e.g. The Smith Weston Unit Trust.
This hint is provided by Law Central Legal.
Well, it depends where you got it from. If you got your Unit Trust from Law Central Legal or Law Central, the opening minutes are already included. But, if you bought your Unit Trust from somewhere else you may not have any opening minutes, and our minutes may be useful.
This hint is provided by Law Central Legal.
Some people say that offends the rules relating to Trust Law. That is not the case.
Consider John. John is the sole Trustee of the Unit Trust and John is the sole Unit Holder. This would offend the rule of Trust Law. Trust Law requires that a Trustee holds something in trust for someone different than themselves.
However let’s say that John's wife Linda also becomes a Unit Holder. That is perfectly acceptable.
What about if John and Linda are Trustees and they are also the sole Unit Holders. That is also fine. This is because John as Trustee is holding part of the Unit Trust assets in trust for someone different than himself. The same is true for Linda. That is a valid trust.
If you want to be more technical, John can even be the sole Trustee and sole Unit Holder. This would be OK if John was holding the units in the Unit Trust on trust for his Family Trust (very common) or as Trustee for someone else.
SUMMARY
John is both sole Trustee and Unit Holder (only OK if John holds the units in trust for another)
John & Linda are the only Trustees and Unit Holders (this is perfectly acceptable).
John is sole Trustee and the Unit Holders are only John and Linda (perfectly acceptable).
This hint is provided by Law Central Legal.
You can have one or more Trustees.
For example you and you business partner can both be Trustees. Therefore, Luke and his business partner Diana can be the sole Trustees.
What about if Diana wants her company (Diana Pty Ltd) to be Trustee? You business partner can be Trustee via her Company. (Companies cost over $1,200 to set up and cost a lot to maintain each year.)
In that example, the Trustees are Luke and Diana Pty Ltd
This hint is provided by Law Central Legal.
It is a personal call whether you want a company to be one of the Trustees. You can have both humans and companies as Trustees together in the same Unit Trust. Alternatively, the Unit Holders can share the cost setting up and maintaining a company between them.
A company costs over $1,200 to set up. They also cost a lot to maintain each year. Mistakes in operating a company incur the wrath of the ASIC. There are criminal and personal fines attached to a director that is a "silent" director and allows his other directors avoid the strict rules and guidelines contained in the 2nd largest piece of legislation in Australia's history known as the Corporations Law.
Some people argue that you get "Limited Liability" from a company. This is more relevant if your Unit Trust is going to "trade" (rather than just hold assets like property). However, since the Corporations Law was introduced in Australia it is now the case that the directors (and even shareholders) can go down with the company.
Let’s say that Ryan, Jason and Nikita set up a company and make it the Corporate Trustee of this Unit Trust. They agree to share the cost of maintaining the company between the 3 of them. They have equal shares in the company. Ryan tells you that he wants to be a director because "I want to know what is going on". Jason and Nikita aren't so certain. If the company trades insolvent then the directors (and deemed directors) go down with the Unit Trust. They however also want to keep and eye on things. The Trustee has to follow the rules of the Unit Trust. The Unit Trust is ultimately controlled by the Unit Holders and not the Trustees.
Also, if you have a Corporate Trustee, all your minutes relating to the Unit Trust need to comply with the Corporations Law. This forces greater administrative burden onto the Unit Trust.
So it is your call whether you need a Corporate Trustee. If you have the money then feel free to stick in a Corporate Trustee.
This hint is provided by Law Central Legal.
This document has been prepared by the law practice Law Central Legal
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