In my commercial law class, the teacher said that a trust carries out the operations of a trading trust while the trustee is responsible for the day to day activities.

Aren't both of those things the same? What's the difference between a trust and trustee in a trading trust?

  • I'm not convinced that this is true, or that it even makes sense. Maybe you weren't following what was being said or the professor was unclear.
    – ohwilleke
    Apr 26 at 18:52

A trust is an obligation in a relationship; a trustee is a person

A trust is the obligation in the relationship whereby person B (the trustee) holds property transferred by person A (the settlor) for the benefit of (in trust for) person C (the beneficiary)

Australian Business Law 2016 [9-760]

The trust is the legal obligation of the trustee to manage the property of the trust for the benefit of the beneficiary subject to the constraints of the trust deed. The trustee is the legal person (which may be a company and there may be more than one) that legally owns the property (the legal owner) and holds it in trust for the beneficiary (the beneficial owner and, again, there may be more than one).


What's the difference between a trust and trustee in a trading trust?

A trading trust is a trust over goodwill and business assets with the trustee being the legal person responsible to creditors source

As a basic analogy, think of a trust as a company that owns property and trustees as the directors who decide what to do with it.

  • Your last paragraph is almost completely wrong in every respect
    – Dale M
    Apr 26 at 8:57
  • I did say it was a basic analogy. Are you able to leave constructive criticism that guides me to improving the post?
    – Rock Ape
    Apr 26 at 9:22
  • Read what you linked to
    – Dale M
    Apr 26 at 9:51

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