Commercial Trust Arrangements
Trust arrangements are used in a wide variety of commercial transactions and for various commercial purposes, including:
- Holding loan security. A security trustee may be appointed for the simple but important purpose of holding security over land on behalf of a group of private or pension investors in a property development or for more complex and high value syndicated loan arrangements.
- Asset holding. An asset, be it a property or another type of asset, may be held by a nominee because the beneficial owner is not in a position to hold the asset itself, perhaps for regulatory reasons or for commercial anonymity.
- Commercial supply arrangements. A trust may be put in place to provide security for one party for the performance of the other’s obligations. It could be as straightforward as funds being placed in an account to be held by a trustee to be released in specified situations, potentially in tranches to a supplier, to give the supplier confidence that the funds are available once it performs its own obligations.
- Share voting. Parties to a commercial arrangement may place shares in the hands of a trustee to ensure agreed corporate strategies are adhered to by the parties concerned.
- Exempt unit trusts. Such vehicles may be used for investment by tax-exempt investors such as charities and pension schemes.
The involvement of an independent professional trustee:
- Ensures proper and compliant governance of the structure.
- Provides reassurance to the participants.
- Ensures external factors, including legislative and regulatory developments, are recognised and addressed.
- Provides impartiality and expertise in relevant decision-making.
- Provides ready access to a market-wide perspective on all aspects of the structure; and
- is, in certain circumstances, required by legislation.
With its long experience of providing trustee and administration services and an in-house team of legal, tax and trust practitioner experts, ITL can discuss with clients and their advisers, and provide, the appropriate commercial trustee services for their requirements.