Trust acquisition is a mechanism that, despite its many advantages, is relatively rarely used in Poland. This is interesting because it is commonly used, among others, in Anglo-Saxon law. Various types of trust structures are widely used in many areas of economic turnover.
Contents:
What is the institution of trusteeship?
A trust is a trust agreement in which the Trustee (English: Settlor) elects and appoints the Trustee (from English Trustee), under the contract, obliged to manage the assets or part thereof of the Entrusting Party and to transfer to him the benefits obtained therefrom.
In Polish law, trust has not been regulated in detail by the legislator, there are no detailed provisions regarding trusts. The lack of regulations may be an obstacle to the popularization of this type of regulation. Although trusts can be effectively used in many areas of law. Currently, trusts are most often used in commercial law for shares in companies, mainly for shares in limited liability companies, although they are increasingly used to acquire shares in a joint-stock company or also to all rights and obligations in partnerships.
Share trust agreement in a capital company
In this article, however, the focus should be on the case where its application is most common, i.e. in the case of a fiduciary entrustment of shares in a limited liability company.
The trust acquisition should take the form of entrusting shares based on a special purpose agreement called a trust agreement. Such an agreement should comprehensively and precisely regulate the relations between the owner of the shares in the company and the trustee who is appointed to temporarily manage these shares. Essentiala negotiation of this agreement should constitute a transfer of shares into the hands of a trustee who will manage them on behalf of the owner. This agreement may be of a fee-based nature or may not provide for any remuneration for the Trustee.
When analyzing the legal nature of such an agreement, it should be indicated that it will be an unnamed agreement, but one that is very similar to a contract of mandate. Therefore, for its analysis and interpretation, the provisions of the Civil Code concerning the contract of mandate, i.e. art. 734 et seq. of the Civil Code, should be used as an aid.
The most common purposes of concluding a trust agreement
Entrusting company shares to a trustee may have various purposes, for example:
- securing the owner's interests in case of disputes between him and other partners of the company;
- allowing the shareholder to concentrate on other matters while at the same time maintaining control over your shares;
- desire to anonymize (silent partner) i.e. when a specific person (for various reasons), does not want to be formally listed as a partner in a specific company (does not want to be listed, for example, National Court Register or other public register) or when it does not wish to be known as the purchaser of the shares.
What is important, this agreement may be disclosed to the company itself and other partners or remain secret from them. However, in the case of the agreement being secret from the company and its other partners, it will be necessary analysis of contract provisions companies in terms of the admissibility of entrusting shares and any additional requirements for such entrustment.
Essential Elements of a Trust Deed
As indicated above, the most important element of a trust agreement is the comprehensive regulation of the rights and obligations of the Trustee and the Entrustor. The most important elements of the share entrustment agreement are:
- subject of the contract – detailed indication of the scope of entrustment of shares
- the purpose of the agreement – i.e. what purpose is to be fulfilled by entrusting the shares in the company to the Trustee,
- duration of the contract – i.e. how long the control over the shares is entrusted to the trustee,
- the principles of trustee remuneration – i.e. what financial conditions will be established for the trustee,
- the rights and obligations of the Trustee and the Entrustor – it is particularly important to include precise guidelines and precise provisions regarding, for example, decisions made on behalf of the share owner or the sale of shares.
Securing the interests of the entrusting party
Considering the fact that the trust deed in fact entrusts the Trustee with shares, the possibility of deciding on their fate, as well as the possibility of deriving benefits from these shares, great importance should be attached to securing the interests of the Trustee. After all, it is impossible to rule out the Trustee's disloyalty or acting to the detriment of the Trustee. For these reasons, the trust agreement for shares should be concluded in writing. It must precisely and in detail regulate many important issues, so there cannot be any room for interpretation or arbitrariness. It is worth remembering that the trustee should be obliged to maintain trade secrets and to take care of the interests of the owner of the shares. In order to secure the interests of the Trustee, contractual penalties should also be introduced into the agreement. This is of great importance from a practical point of view, because in some cases, in the event of a dispute between the Trustee and the Trustee and a court case, it may be significantly difficult to prove the damage related to the Trustee's unconscionable or inconsistent with the agreement action. In this situation, the most effective security is a contractual penalty, which is a kind of "lump-sum compensation" and in fact releases you from the obligation to prove actual damage, which will be crucial in the trial.
Summary
To sum up, a fiduciary share acquisition agreement in a limited liability company can be an extremely interesting and beneficial tool for company partners or investors who do not want to disclose their capital involvement in a given venture. Preparation of a contract with Due to its complex nature, it should certainly be entrusted to an experienced legal advisor who will prepare an agreement that protects the interests of the entrusting party to the greatest possible extent and ensures the security of the share entrustment transaction.
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