A corporate trustee is a company appointed to act as the trustee of a trust, holding and managing assets on behalf of beneficiaries in accordance with the trust deed. Because the company is a separate legal entity, it provides limited liability, clearer separation of assets, and greater continuity compared to an individual trustee.\u00a0 This article explains what a corporate trustee is, how it works, and the advantages and disadvantages of using one.<\/p>\n\n\n\n
Corporate trustees, or ‘trust corporations,’ are a particular category of trustees that the law recognises. They have certain powers and responsibilities that trustees generally do not. <\/p>\n\n\n\n
Just because a body refers to itself as a trust corporation does not necessarily make it so. <\/p>\n<\/div>\n\n\n\n
By law, a trust corporation must be one of the following:<\/p>\n\n\n\n
In practice, the majority of corporate trustees are custodian trustees that either:<\/p>\n\n\n\n
Key Statistics<\/strong><\/p>\n Sources<\/strong><\/p>\n These trust corporations are incorporated businesses (almost always companies) that seek to undertake the same activities as a trustee who is a natural person. However, an important distinction is that they usually have entitlements to charge a fee for their services. Conversely, trustees that are natural persons cannot always do the same. <\/p>\n\n\n\n Common kinds of services these kinds of corporate trustees provide include:<\/p>\n\n\n\n Additionally, any company incorporated in the UK or (at least for now) an EU member state can obtain the status of a trust corporation if either:<\/p>\n\n\n\n Additionally, the company\u2019s constitution cannot restrict its ability to become a corporate trustee. <\/p>\n<\/div>\n\n\n\n As you may know, if you are a company director, you owe specific duties to your company, like avoiding conflicts of interest. The law considers these responsibilities a special kind of \u2018fiduciary duty.\u2019 Ultimately, it refers to a unique relationship owed by one person to another. <\/p>\n\n\n\n If you owe a fiduciary duty, the law requires that you act towards this person with the utmost good faith. Indeed, this is one of the highest standards the law imposes on individuals. <\/p>\n<\/div>\n\n\n\n Just like a director owes a duty to their company, so does a trustee owe a duty to their beneficiary. Beneficiaries are individuals who stand to benefit from the trust’s property. <\/p>\n\n\n\n As a result, company directors can owe two sets of fiduciary duties:<\/p>\n\n\n\n The legal position of company directors acting for trust corporations is not entirely clear. Nonetheless, the law can hold company directors personally liable if the company breaches its duties as a trustee. <\/p>\n\n\n\n Therefore, you should advise yourself of this risk if you are a director of a custodian trustee company. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n\n
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Businesses Acting in a Fiduciary Capacity<\/h2>\n\n\n\n
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Fiduciary Duties and Company Directors<\/h3>\n\n\n\n
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