The trust results from an act whereby a person, the settlor, transfers property from the settlor’s patrimony to another patrimony constituted by the settlor, which he appropriates to a particular purpose and which a trustee undertakes, by the trustee’s acceptance, to hold and administer.
A trust operating a commercial enterprise is a trust that carries on an organized economic activity consisting of producing, administering or alienating property, or providing a service in order to make a profit. The following trusts are deemed to be trusts operating a commercial enterprise:
- business trusts (such as commercial, financial, industrial or professional trusts)
- investment trusts (such as mutual fund trusts or royalty trusts whose investors acquire equity units in an operating natural resource entreprise)
- real estate investment trusts
As a rule, the following trusts are not considered trusts operating a commercial enterprise:
- private trusts constituted for the sole purpose of producing a benefit to specified persons, such as
- retirement trusts,
- partner buy-sell trusts,
- stock purchase trusts,
- security trusts,
- stock escrow trusts,
- voting trusts created under an agreement or a testament (such trusts usually represent an investment or asset protection vehicle and do not carry on business activities),
- testamentary trusts,
- social trusts.
Last update: September 7, 2023
