Trusts, Foundations and private companies can all be used to hold assets, including shares in other companies, investments and, subject to applicable local laws, real estate. However, they are fundamentally different legal structures and are generally established for different purposes.
The most important differences relate to legal ownership, control, governance and who ultimately benefits from the structure.
| Trust | Foundation | Private Company |
Who establishes it? | Settlor | Founder | Shareholder(s) |
How is it established? | A contract entered into between the Settlor and Trustee. Trust is not registered. | Registration application submitted to the Registrar. | Incorporation application submitted to the Registrar. |
Who manages it? | Trustee | Council | Directors |
Who owns the assets? | Trustee holds legal title to assets | Foundation owns the assets | Company owns the assets |
Who benefits economically? | Beneficiaries | Beneficiaries or specified purposes | Shareholders |
Does the person establishing it retain ownership? | No - Settlor transfers assets to Trustee who owns the assets on trust for beneficiaries. | No - Founder transfers assets to the Foundation who owns assets. | Yes, indirectly. Shareholder owns the shares in the company which owns the asset. |
Does it exist perpetually? | Trust continues according to its terms and applicable law. | Yes - subject to continued registration. | Yes - subject to renewal of commercial licence. |
How is it governed? | According to Trust deed and applicable law | According to Charter, By-laws and applicable law | According to Articles of Association and applicable law. |
Does it have separate legal personality? | No | Yes | Yes |
Typical use | Holding and managing assets for Beneficiaries | Long-term asset holding, family governance and succession | Carrying on business or holding assets for shareholders |