How is a unit trust set up
What is the difference between a company and a Unit Trust
hello my name's dr. Bret Davies what is
the difference between a company like a
proprietor limited company and a unit
trust they're both very similar they
once got units which are as the
commodity to know how much you own of
that unit trust and those got shares so
if there's 5,000 units and you own all
5000 you're the total owner of that unit
trust if there's a price but a company
and this 5000 shares on issue and you
own all of them will you own a HUD of a
set of the shareholding of the company
well what if you only owe let's say
1,000 units love you have 1/5 of the
unit trust what if you only own 1,000 of
the 5000 shares of the company well do I
have 1/5 of the company don't have
majority of the Trop unit trusts are
created over thousands of years when the
Norman Conquest came across from France
and attacked and took over Great Britain
trustful form became very popular from
that time on 1066
I think trust continue to develop since
then that unit trusts not much different
to what they were all those years ago
and they're created by the common law
they're created by non-government
intervention a unit trust is that type
of vehicle a company is completely
different a very modern vehicle only a
few hundred years old and you have to do
it through government so there's an act
of parliament called the Corporations
Act with many regulations from it if
they're the corporations that is the
second largest piece of legislation in
Australia what's the largest piece of
legislation
it's the income tax assessment acts
their larger taxes are more confusing
than companies law the Corporations Act
says it states very clearly how you form
a company and the regulator the
that looks after at the government
agency the looks after it is basic
australian securities investment
commission and you register your company
through that the companies are very
controlled you can't do much with them
compared with unit trusts you have a
trustee of a unit trust which you can
change with the company itself is the
entity a company has directors unit
holders do not have directors they just
have a trustee the unit holders are the
people that boss the trustee of the unit
trust around the shareholders the
viewlet boss the directors who then
direct how the company operates now when
you die your assets dealt with it you
will so let's have a look what happens
in your will I'll go to your will and
they'll have five thousand units and the
unit trust
well they do this through to your wife
or children or husband might have five
thousand shares where those shares will
also be gifted to the beneficiaries if
you die you have no interested the
company assets and the unit trust you do
so there's a proprietary interest right
we get a trust which you don't get in a
company lots of differences your to
trust and less regulation are a lot more
fun to use telephonist we need more help
