I think one difference is in the case of a Trust my name can be removed at any time from the corporation. not sure about other implications though. THANKS.
2007-09-24 15:34:30 · 3 answers · asked by Anonymous in Business & Finance ➔ Corporations
These are two completely separate things entirely. If you set up a trust, it belongs to the Testator (your parents in this case) and is managed by a second or third party (an attorney or you for instance). A corporation is a company set up by incorporation with the Secretary of State to do business as a sole business, which includes LLC, (Limited Liability Corporation) and INC (Incorporated Business) or even a sole proprietorship.
These types of incorporation protects an individual for personal liability of either the assets or losses of the corporation and have nothing to do at all with "Trusts". A "Trust" or better known as a "Trust Fund" is an account that is designated to a person to provide for future distribution, as designated by the originator or the Trustee.
By setting up a "Trust" for someone, you are allocating assets or money either by a lump sump sum or by distribution payments over a period of time. In doing so, you may relinquish your rights to the funds in that account due to the language of the trust fund. These assets then belong to the beneficiary of the trust and if you are not named as a Trustee, cannot touch the assets.
However if you are indeed the Trustee, you have the fiduciary responsibility to distribute the funds according to the account details. You may on behalf of the Testator (your parents) use funds for reasonable reasons on behalf of them, but not for yourself unless it is for your time or efforts that are in their best interest.
So, Trusts and Incorporation are not the same. Incorporation is to protect a business owner from personal lawsuits. Trusts are typically for private individuals and once set up are for a beneficary of that Trust (your parents in this case).
2007-09-24 16:19:53 · answer #1 · answered by Boomer 5 · 0⤊ 0⤋
A trust is usually a financial vehicle that makes investments. It has significant financial assets, but few liabilities.
A corporation is a legal entity that can own or run businesses.
2007-09-24 15:41:07 · answer #2 · answered by hottotrot1_usa 7 · 0⤊ 0⤋
Don't listen to a bunch of B.S. this is something you need a lawyer for. Starting your own company or dealing with Trust's is a complicated affair go to http://smallbusiness.findlaw.com for some help full info
2007-09-24 15:44:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋