Chapman Tripp
Added: Feb 22, 2012
The Law Commission is looking into whether the regulation of trading trusts gives enough protection to creditors and beneficiaries in circumstances of insolvency.
For the purposes of the review, the Commission has defined a trading trust as a structure under which a company holds property on trust for nominated beneficiaries while holding few or no assets directly in its own right. But it is seeking feedback on what definition, if any, should be used in any new legislation.
Key themes explored in the review are:
- the risks to creditors in the current regime
- the risks to beneficiaries, and
- the lack of clarity in the rules regarding the liquidation of trustee companies.