3 Individual natural person acting as a sole trustee The individual person Dave Devonshire as trustee for the Dave Family Trust trading as Dave’s Diving School. Dave Devonshire as the individual person (in the capacity of trustee). The business name or trading name has no legal status for grouping or payroll tax purposes – it is for advertising and customer information purposes only. The business entity is ‘Dave Devonshire as trustee for the Dave Family Trust’. 4 Company (private or public) carrying on business in own right Majority of directors ABC Pty Ltd; with two directors. At director level must be unanimous, as one of two is not a majority. If ABC Pty Ltd had directors, two would constitute a majority. 5 Company (public or private) carrying on business in own right Majority of voting shares ABC Pty Ltd has 100 voting shares, spread evenly over four individuals (25 voting shares each). Any three of the four shareholders together would be a controlling interest. Any two shareholders together represent exactly 50% of voting shares, which is not a majority, which must be greater than 50%. 6 Company (public or private) acting as trustee Majority of voting shares Majority of directors As per 4 and 5 above. As per 4 and 5 above. As per 4 and 5 above. 7 Association Persons who together constitute more than 50% of the board of management (sometimes called ‘the committee’) (or equivalent). Darwin Surf Riders Association has a board of management of seven. All members of the board of management are elected by and from the local members. Any four of these persons acting together have a controlling interest.
8 Association Persons who can control the composition of the board of management. The articles of Darwin South Surf Riders Association allow a simple majority of members in a general meeting of which proper notice has been given and at which a quorum is present to change any or all of the board of management. A majority of members in general meeting as specified in articles. 9 Association Persons who can control the composition of the board of management. The Origami Association has a board of management of 11 people. Under its articles, five of these people are elected by and from local members, and the remaining six are appointed by the Australian Association of Origami Clubs. The Australian Association of Origami Clubs (who can appoint the majority of committee members). As a consequence, the Australian Association of Origami Clubs is grouped with the Darwin-TimorLeste Origami Association. 10 Partnership Persons who are entitled to, individually or together, (beneficially or not) more than 50% of the partnership’s capital and or income. A, B and C carry on business as ABC Services under the ABC Partnership. Each has a one-third entitlement to capital and profits. A and B together A and C together B and C together A, B and C together.
14 Discretionary trust Any beneficiary or combination of beneficiaries. XYZ Pty Ltd acts as trustee for the Family Trust, which carries on business as Jones Painting Services. The trust has been set up as a discretionary trust. The beneficiaries are John, Mary, Annabel, Jack and David Jones. John alone Mary alone Annabel alone Jack David alone, or any combination of any two, three or four of the above five individuals, or all five of the above individuals together. Most family trusts are discretionary trusts. The defining characteristic of a discretionary trust is that the trustee has the unfettered power to distribute income and/or capital to any or none of the beneficiaries, in any proportion between zero and 100%. As a consequence, any beneficiary, or any combination of beneficiaries, as a potential recipient of 100% of the capital and income, is deemed to have a controlling interest in the business carried on under the trust. 15 types of trusts The person or persons with an entitlement to more than 50% of the income and or capital of the trust. - The person or persons with an entitlement to more than 50% of the income and or capital of the trust Each trust deed will be reviewed by TRO to determine the controlling interest provisions. Where a trust contains a provision that provides broad powers to the trustee, the trust may be determined to be discretionary in nature, under which any beneficiary alone, or any combination of beneficiaries acting together, have a controlling interest (see reference 14 above).