BUSINESS TRUST AGREEMENT,
Why is it that business trust agreements are created
When a property is overseen by someone else who manages it so that the beneficiaries are benefitted it is called a trust agreement and the person who oversees this for the beneficiaries is called a trustee.
In the business trust agreement the settler gives all his assets to the trustee and the trustee is the one that holds the title legally. This happens when people want their property to be left to the children. In this case, the trustee represents all the beneficiaries interests.
In the business trust agreement the trustee manages all the operations of the business and the profits are given to the beneficiaries. The creator of the business is called the settler and the beneficiaries get part of the income as long as the business trust agreement is enforced.
When there is no business trust agreement anymore, the business gets transferred to the beneficiaries. However, a business trust agreement can only be set up when the business proves that they are running a legitimate business and this is an alternative to standard partnerships as the partners interests are run by a trustee. The beneficiaries in such cases have limited liability where the profits of the business are concerned.
The reasons why business trust agreements are held are so that the assets are safeguarded from creditors, taxation as well as lawsuits. This states that the agreement duration, the responsibilities which the trustee has as well as the beneficiaries interests. The beneficiaries get certificates which prove their interest in the trust.
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