Trust company: a tool to support companies

Trust companies

The trust companies still represent an “option” little known by the companies – perhaps because the same consultants of the companies ignore the real potential, not knowing enough about the tool. Result: we run the risk of not using an institution, the fiduciary shop, which in many situations can be of great help to businesses. It is, it must be said, a legitimate “option”, absolutely not aimed at concealing unlawful behavior (as those who do not know the tool commonly think), but aimed, instead, at protecting the right to privacy, in full compliance with tax regulations, penalty, and anti-money laundering.

Let’s take a step back and see what the trust companies are at offshorecitizen. Thus states the art. 1 of the Law of 23 November 1939, n. 1966, which still today represents the reference provision of the sector: « They are fiduciary and auditing companies and are subject to this law those which, however, denominated, are proposed in the form of business, to assume the administration of assets on behalf of third parties, the organization and audit of companies and the representation of holders of shares and bonds “. The fiduciary mandate is the contract with which this administration of assets is carried out which has the effect of separating the assets of the trust company from that of the clients, entrusted in trust (managed in special fiduciary current accounts according to the instructions given by the clients). grantors).

Therefore, the purpose of the trust companies is to manage assets on behalf of third parties. But which assets can be subject to fiduciary registration? Below is a summary list of administrable assets: shareholdings in corporations, works of art, securities and financial products, insurance, third-party assets on deposit/guarantee, credits, current accounts, real estate.

It should be noted that the trust company can administer the assets either directly or through a mandate to administer without direct registration – a type of contract created to be able to “shield” the properties abroad.

With regard to the objectives achievable through the use of a trust company, we summarize some of them with the help of some practical examples.

1. Commercial confidentiality in the header of investments

In the event that an entrepreneur, who already works in a specific sector, wants to operate with a different brand (for example, to practice a different price policy aimed at conquering a new customer target ), it seems appropriate to start the new business activity by “shielding ”The company participation with a trust company.

2. Generational transfer

In view of a gradual transfer of the holdings of a holding company from the founder to the heirs, the founder could put his participation (an underlying underlying trustor) under a fiduciary mandate and then gradually transfer part of the shares to the heirs “internally in office”, upon the occurrence of certain and pre-established conditions (more trustworthy underlying the mandate). Outside it would always appear only a participation in the name of a trust company which, in addition to guaranteeing the possibility of voting rights for the founder, would also guarantee the ascertainment of the conditions established by the founder for the heirs for subsequent transfers.

3. Anonymity for the management of delicate negotiations

In the course of a business negotiation for the acquisition of a company, an entrepreneur, operating in competition with respect to the transferring property, may wish not to outsource his name to the seller. This is to avoid disruption in the negotiation (we think not only of the price but also of other conditions).

4. Guarantee for the execution of shareholders’ agreements

During the sale of a minority interest, the transferring shareholder – who will maintain a controlling interest in the company – intends to have a counterparty shareholder agreement signed to govern certain aspects of future governance. In order to achieve a gradual transfer of the predetermined shareholding to the incoming shareholder and to enforce the shareholders’ agreements, he signs the investment subject to sale to a trust company (whose grantor will initially be the only transferring shareholder). Subsequently, the various transfers will be made to the purchaser “internally” – on the outside, the trust company would continue to appear solely as a partner.

5. Guarantee of business continuity

In the process of setting up a company between two partners (in which equal shareholdings are desired), we opt for a 4% stake in a trust company (with the same partners in trustees), leaving the remaining 96% to the two partners. This makes it possible to establish now by then – in the hypothesis of future disagreements and in certain matters (think of the approval of the company financial statements) – that it will be the trust company to take certain decisions based on indications set by the shareholders at a time, the current one, in which there are no differences between entrepreneurs.

6. Exploit the system of administered savings

In holding various assets (corporate equity investments, real estate, securities files) in Italy and abroad, an entrepreneur intends to make use of the system of administered savings which allows him an optimal fiscal management, managed anonymously by the trust company, with an optimization also in terms of declaration of data to the Treasury (think, for example, of the fact that assets held abroad through trust companies are considered to all effects as values held in Italy, with exemption from completing the Rw framework).

Trust agreement – a way to anonymity in the company?

Often, for various reasons, a person who wants to have control over shares in a limited liability company does not participate in the company in person as a partner despite the financial outlay. The reason for this may be, for example, the prohibition of competition in connection with the exercise of functions in other companies. Often, such a person transfers funds to contribute or acquire shares in a company trusted by a person from a family or friends, who is listed in the National Court Registry as a partner. However, such a situation is risky for the person exposing the funds, because, in the event of a conflict with the person who subscribes to the shares, the investor has no control over the shares and decision making in the company.

Recently, it has become popular in such situations to regulate this type of relationship by signing a trust agreement. Such an agreement is not regulated in the Civil Code, but it is allowed under the provisions on contractual freedom, and moreover, often such an agreement has already been subject to individual interpretations and court judgments. With reference to the provisions of a trust deed, the provisions of the Civil Code regarding the order should be applied accordingly.

In such an agreement, the trusteeship consists in the fact that the shares in the company include the trustee and that he is listed in the Register of Entrepreneurs of the National Court Register as a partner. However, funds for the purchase of these shares are transferred by the entity, and he is entitled to obtain all benefits related to shares, which of course should be explicitly stipulated in the contract.

The conclusion of a trust deed does not have to be disclosed to the other shareholders of the company. The actual purchaser of shares will only act in a contract with a trustee. However, all transactions and activities related to the purchase and possession of shares will be performed by the trustee in his own name. Establishing a trust can therefore only be kept a secret between the trustee and the trustee.

The trustee operates in the company and performs all activities for the benefit of the trustee, in accordance with the instructions of the trustee and in accordance with the provisions of the trust deed. All provisions regarding the manner of exercising rights in the company by the trustee should be specified in the contract, primarily the contract should contain provisions regarding the obligation to strictly comply with the instructions of the trustee, and include granting a power of attorney to exercise the rights in the company. The contract should also include provisions on the obligation to transfer ownership of shares to the entity that entrusts or appoints it at its request or at a date specified by the parties in advance.

With regard to the trustee, in the scope of taxes, he will be required to settle only the remuneration due to the party entrusting him for the performance of the contract. Despite the fact that the trustee acquires shares in his own name, the taxpayer commissioned by the investor remains neutral to him.