Restructuring Business Trusts as Unregistered Companies

Abstract

The use of alternative business forms harks back to the unincorporated joint stock company that was often a partnership with trust characteristics. Real Estate Investment Trusts (REITs) and business trusts form a large component of the Singapore Exchange but there are issues with their liquidation and restructuring. They have been analogised with the company which has clear asset partitioning conferring creditor claim priority to a segregated fund. Such partitioning also existed with partnerships and trusts and this was recognised by Victorian legislatures which crafted early company legislation. While Australian courts have focused on winding up trustees as there is no ‘trust’ as such, restructuring poses more problems, especially for REITs with separate custodian-trustees and managers. It is argued here that they could be seen as ‘unregistered companies’ under Commonwealth Companies Acts and restructured in a way that mirrors an incorporated company.