When you’re going into business or investment with others, the last thing you want is confusion about who owns what. That’s where a unit trust business structure can make life easier. In simple terms, a unit trust spells out exactly who gets what share of the income and assets. Everyone holds “units” (like slices of a pie), so ownership is clear and disputes are less likely.
At Propeller Advisory, we’ll guide you through the ins and outs of unit trusts, help you decide if it’s the right fit, and make sure the setup is done properly from the start
What is a Unit Trust Business Structure?
A unit trust is a legal structure often used by investors or business partners. Instead of income and assets being distributed at the trustee’s discretion (like a family trust), each beneficiary owns specific “units” in the trust.
Here’s how it works in practice:
- Units = ownership. If you hold 40 out of 100 units, you’re entitled to 40% of the income and assets.
- Trustee = manager. The trustee runs the trust according to the rules in the trust deed.
- Unit holders = beneficiaries. These are the individuals or entities that own the units.
It’s a structure that works well for joint ventures, property investments, or businesses where unrelated parties are involved, because everything is divided fairly and transparently.
Why Choose a Unit Trust Business Structure?
For business partners and investors who want clarity from day one, a unit trust has plenty to offer. Everyone knows exactly what they’re entitled to, which makes decision-making and profit-sharing straightforward.
It’s especially appealing in situations where unrelated parties pool resources, like property development or joint ventures, because it avoids the “grey areas” that can cause disputes later on.
Benefits of a Unit Trust Business Structure for Businesses and Investments
There are some clear advantages to choosing a unit trust:
- Clarity in ownership: Everyone knows their share and entitlements.
- Flexibility to grow: Units can be issued or transferred if more investors come on board.
- Asset protection: The trust separates ownership from day-to-day operations.
- Attractive for investments: Particularly useful for property and other ventures where multiple parties pool resources.
Things to Know Before Setting Up a Unit Trust Business Structure
Like any structure, there are some important considerations to keep in mind:
- Less flexible than a family trust: Distributions must follow unit holdings, no income splitting at discretion.
- Setup and admin costs: You’ll need to factor in the cost of establishing and maintaining compliance.
- Good paperwork matters: The trust deed needs to be watertight to avoid disputes later.
- Tax rules: Unit trusts have their own tax considerations, so advice is key.
For many, the benefits outweigh the drawbacks, but it depends on your goals, the people involved, and what you’re building together.
How Propeller Advisory Can Support Your Unit Trust Business Structure
Business structures can sound dry, but they don’t have to be stressful. Our job is to make it clear, simple, and tailored to you.
If a unit trust is right for your situation, we’ll:
- Draft and register the trust correctly so you’re compliant from day one.
- Review and explain the trust deed in plain English.
- Provide ongoing advice on tax and compliance.
- Make sure the structure actually works for your business or investment goals.
With Propeller Advisory, you’ll never be left guessing. We’re here to guide you step by step, without the jargon. Setting up a unit trust does not need to be overwhelming. With the right support, it can give you peace of mind and confidence that everyone’s share is protected and clearly defined. Let’s make it simple. Book a consult today or call 1800 PROPEL.
Thinking About Setting Up a Company?
Still tossing up if a company is right for you? Let’s chat. We’ll make it simple, strategic, and tailored to your goals. We help service-based businesses build smarter, safer setups that support long-term growth. Contact us online, book a consultation, or call us on ☎ 1800 776 735.
FAQs
1. What’s the difference between a unit trust and a family trust?
A family trust lets the trustee decide how income is split. A unit trust locks in distributions based on units held.
2. Who uses a unit trust business structure?
They’re common for joint ventures, property investments, and businesses with unrelated partners.
3. Can a unit trust own a business?
Yes. A unit trust can own and operate a business, just like other structures.
4. How are profits taxed in a unit trust?
Profits are distributed to unit holders, who then pay tax at their individual or company rates.
5. How much does it cost to set up a unit trust?
It varies, but you’ll need to budget for both the initial setup and ongoing compliance support.
