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.