People with experience and knowledge of trading trusts have until 21 July to make a submission to the Victorian Law Reform Commission’s review of this popular business structure.
The Commission is reviewing what beneficiaries should be able to do if there is a disagreement, they are subject to oppressive conduct by the trustee, and they want to leave the trust.
Trading trusts are often used as a way to structure businesses, as an alternative to companies. They are used by many small family businesses as well as larger enterprises.
Like other trusts, a trading trust has a trustee which holds property on behalf of beneficiaries. The difference is that a trading trust carries on a business.
The Attorney-General, Robert Clark, has asked the Commission to review and report on whether the beneficiaries of trading trusts should have similar rights to those provided to shareholders of companies under section 232 of the Corporations Act.
The Hon. Philip Cummins, Chair of the Victorian Law Reform Commission, said: "Currently, it is difficult for beneficiaries of a trading trust to leave the trust if they suffer from oppressive conduct by trustees. What beneficiaries can do in this situation is unclear, as the courts have reached different conclusions in cases involving trading trusts.
"We are seeking submissions and responses from business people, lawyers and members of the public with knowledge and experience. We are interested in receiving submissions about what remedies should be available to beneficiaries who are subject to oppressive conduct."
The Commission has published a consultation paper, available at
www.lawreform.vic.gov.au and calls for submissions by 21 July.