A trust can be used to run a business. But because it is not a legal entity, the trustee undertakes the business activities on behalf of the trust. A trustee can be an individual or a company — we recommend a corporate trustee. You should review the trust deed to ensure the trustee has the power to enter into business transactions.

How the trustee distributes the income the business generates will depend on whether its a discretionary trust or unit trust.

Type of Trust Distribution
Discretionary Trust Beneficiaries of the trust will distribute income at the trustee’s discretion
Unit Trust Income will be distributed among unitholders per their unitholdings. The trustee has no discretion to change this.


It’s likely that you will operate your business through a unit trust as business partners will want to make sure they receive their fair share of the business’ profits. If you are running a business through a trust, you will need to apply for an ABN and a TFN for the trust. You should also consider whether you are required to register for GST and PAYG.

What Documents Do I Need?

When operating a business through a trust, you need the appropriate documents in place. A trust is a complex structure and complications could arise if you don’t set up the trust properly. This includes a trust deed that allows the trustee to conduct the business. Make sure that the trust deed doesn’t prevent the trustee from undertaking the relevant business activities.

Shareholders Agreement

If you have a discretionary trust with a corporate trustee, and the corporate trustee has many shareholders, it’s sensible to have a shareholders agreement in place. A shareholders agreement will set out the decision making process.

It’s important to know who controls the trustee as the trustee is the entity that enters into transactions and distributes income to the beneficiaries of the trust.

Where you have a unit trust with a corporate trustee, you should consider having a combined unitholders and shareholders agreement.

This agreement sets out the rights and obligations of the shareholders in the corporate trustee and the unitholders in the unit trust. It also covers how to issue and transfer more shares/units.

In addition to the documents relating to the trust, you will need documents connected to operating your business. The types of documents you will need depends on:

  • the type of product or service you are providing;
  • the industry you are in; and
  • your customers, suppliers, employees and contractors.

What About Set-Up and Ongoing Costs?

If you’re setting up a company to act as a corporate trustee, there are ASIC fees that you will need to pay along with annual review fees. You will also need to factor in the costs to draft the trust documents (for example, the trust deed and shareholders agreement) as well as to prepare the accounts.

Key Takeaways

When used correctly, a trust can be an effective way to operate your business. Consider what agreements you need in place as well as whether you should register the trust for an ABN, TFN, GST or PAYG. If you have any questions about running your business through a trust, get in touch with our specialist business structuring lawyers on 1300 544 755.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Maya Lash
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy