Unlike a company, a trust is not a separate legal entity. Trusts are often used in connection with running a business for the benefit of others. A trust is a structure where a trustee (an individual or company) carries out the business on behalf of the members (or beneficiaries) of the trust. Family businesses are often set up as a trust so that each family member can be made a beneficiary without having any involvement in how the business is run.
Reduced liability – especially if corporate trustee.
Flexibility of asset and income distribution.
Can be expensive and complex to establish and administer.
Difficult to dissolve, dismantle, or make changes once established particularly where children are involved.
Any profits retained to reinvest into the business, will incur penalty tax rates.
Cannot distribute losses, only profits.