Declaration of Trust – Business Trust
This is a Declaration of Trust that creates a business
trust. A business trust is a unique entity that is
generally classified as an association, taxed as a
corporation, and organized under trust law
principles. This Declaration of Trust sets up the
framework for the operation of the business. In the
declaration, the trustors giving the trust to the trust,
the trust is ran by the trustee, for the benefit of the
beneficiaries.
ALL INFORMATION AND FORMS ARE PROVIDED “AS IS” WITHOUT ANY WARRANTY,
EXPRESS, IMPLIED, OR OTHERWISE, INCLUDING AS TO THEIR LEGAL EFFECT AND
COMPLETENESS. They are for guidance and should be modified to meet your needs and the
Inc. of your state. Use at your own risk. Docstoc
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modifying any form is not creating or entering into an Attorney-Client relationship. Docstoc
does not provide legal advice. The information and forms are not a substitute for the advice of
your own attorney.
DECLARATION OF TRUST
THIS DECLARATION OF TRUST (the “Declaration”), made as of ___________ [Instruction:
Insert Date], among ___________ [Instruction: Insert Name of Trustor1], ___________
[Instruction: Insert Address], ___________ [Instruction: Insert Name of Trustor 2],
___________, ___________ [Instruction: Insert Address] and [Instruction: Insert Name of
Trustor 3], ___________ [Instruction: Insert Address] (individually and collectively, the
“Trustors”) and ___________ [Instruction: Insert Name of Trustee], ___________
[Instruction: Insert Address] (the “Trustee”).
1. Classification of organization. This Declaration is intended to create a business trust (the
"Trust"), and not a partnership or a joint-stock association.
2. Trust Name, Purpose and Location.
A. The Trust created in this Declaration shall be called the ___________ [Instruction:
Insert Trust Name] Trust.
B. The Trustee, in the name of the Trust, may engage in any general business purpose, and
perform all acts that the Trustee deems necessary in furtherance of such purpose.
C. The principal office of the Trust is located at ___________ [Instruction: Insert
Address].
3. Transfer to Trustee.
A. Appointment. The Trustors hereby appoint ___________ [Instruction: Insert Name of
Trustee] Trustee under this Declaration. If, at any time, the Trustee is unable or unwilling to
serve as Trustee, the Trustors may appoint a substitute or successor Trustee. At all times that
Trustee is serving hereunder, Trustee shall be compensated at the rate of ___________ Dollars
($____) [Instruction: Insert Amount] per annum, payable in equal monthly installments.
B. Transfer. The Trustors transfer to the Trustee all of their right, title, and interest in the
property described in Exhibit “A”, attached hereto and incorporated herein (the “Property”).
C. Trust Res. The Trustee will hold the Property, all property hereafter acquired, and all
income and profits (collectively the "Trust Res"), in trust, and shall manage, administer, collect,
and dispose of the Trust Res for the benefit of persons who acquire shares of beneficial interest
in the Trust (the "Beneficiaries").
D. Power of Trustee. The Trustee shall have absolute and exclusive power and authority to
manage the Trust Res and to conduct the Trust business, exercisable without the consent of the
Beneficiaries, to the same extent as if the Trustee was the owner of such property and business,
and limited only as specifically set forth in this Declaration. The Trustee’s powers shall include,
but shall not be limited to or by, the following:
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i. to undertake or engage in any type of commercial, industrial, or other business or
venture;
ii. to purchase or otherwise acquire real or personal property, and to sell, exchange,
mortgage, grant a security interest in, pledge, or in any manner deal with the Trust Res or any
part thereof or any interest therein, upon such terms and for such consideration as they deem
proper;
iii. to incur indebtedness, borrow or lend money with or without security, execute,
accept, discount, negotiate, and deal in commercial paper and evidences of indebtedness, and
execute any written instruments;
iv. to prosecute and defend all actions affecting the Trust and/or the Trust Res, and to
compromise or settle any suits, claims, or demands, or waive or release any rights relating to the
Trust;
v. to employ officers, agents, attorneys, and employees; and
vi. to adopt and enforce such bylaws, not inconsistent with this Declaration, as they may
from time to time deem proper.
4. Term. The Trust shall commence upon the execution hereof and continue until ___________
[Instruction: Insert Date], except that it may be terminated at any earlier time by the Trustee,
provided that Beneficiaries that hold Shares entitling them to exercise three quarters (3/4) of the
voting power of the Trust assent to said termination. Assent must be given by voting at a meeting
of Beneficiaries for that purpose, pursuant to notice given as provided in paragraph 7.
5. Shares of Beneficial Interest. The Beneficial interest in the Trust shall consist of
___________ (____) [Instruction: Insert Number] shares (each a “Share”), each with a par
value of ___________ Dollars ($____)[Instruction: Insert Amount]. The Trustee may sell,
exchange, or acquire Shares for such sums as the Trustee considers proper. The Trustee shall
issue certificates to the purchasers of Shares (each, a “Share Certificate”) in such form as the
Trustee deem proper, evidencing the beneficial interests of the purchasers(s). The purchaser(s) of
Shares shall be the Beneficiaries of the Trust, and shall be bound by the provisions of this
Declaration. The Shares shall entitle the Beneficiaries to participate in all dividends and other
distributions of income or principal, as the Trustee, in the Trustee’s sole discretion, from time to
time, shall deem advisable. Each Beneficiary shall share in dividends or other distributions in the
proportion which the number of Shares owned by the Beneficiary bears to the total number of
Shares issued and outstanding. Each Share issued and outstanding shall entitle the holder thereof
to one vote on all matters properly placed before the Beneficiaries for their vote. No Beneficiary
shall have the right to ask for partition of the Trust Res during the continuance of this Trust. No
Beneficiary shall have any interest in any portion of the Trust Res, and shall have only an interest
in dividends and other distributions.
6. Transfer of Shares. A Beneficiary may transfer a Share Certificate in person or by a duly
authorized attorney. The transferee shall surrender the Share Certificate, duly endorsed for
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transfer, to the Trustee, who shall execute a new certificate representing the Share(s) transferred.
By acceptance of a Share Certificate transferred to him or any Share Certificate issued in its
place, the transferee shall become a Beneficiary, and shall be bound by the provisions of this
Declaration. No transfer shall be binding upon the Trustee until it has been recorded on the
transfer books of the Trust.
7. Meetings of Beneficiaries. An annual meeting of Beneficiaries shall be held at ___________
[Instruction: Insert Time] on the first ___________ [Instruction: Insert Day of the Week] in
___________ [Instruction: Insert Month] of each year, or on the following day if such Monday
is a legal holiday. In addition, the Trustee may call special meetings of the Beneficiaries at such
times as Trustee considers advisable. Written notice of every meeting, specifying the time, place,
and the purpose, shall be sent to the Beneficiaries no less than ten (10) days prior to the holding
of the meeting. The owners of one half (1/2) of the issued and outstanding Shares of beneficial
interest, or their proxies, shall constitute a quorum for the purposes of any meeting, and a
majority of the Shares represented and voting at the meeting shall control on any issue
considered at the meeting, except as otherwise specifically provided herein.
8. Continuation of Trust. The death, insolvency, or incompetency of a Beneficiary, or the
transfer of Shares of beneficial interest, shall not terminate the Trust, or entitle the legal
representative of the Beneficiary, or the transferee, to any accounting or to any legal action
against the Trust Res or the Trustee. Upon the death, insolvency, or incompetency of a
Beneficiary, his legal representative shall succeed as a Beneficiary, and shall be bound by the
provisions of this Declaration of Trust.
9. No Personal Liability.
A. The Beneficiaries shall not be held personally liable for any act or omission of the
Trustee. All persons dealing with the Trustee, or with any agent of the Trustee, shall look only to
the Trust Res for the payment of any sum due as a result of their dealing. In every instrument
executed by the Trustee creating an obligation of any kind, the Trustee shall stipulate that neither
they nor the Beneficiaries shall be held to any personal liability under the instrument.
B. The Trustee shall not be personally liable for any loss resulting from an act or omission to
act in the execution of any of the powers conferred by this Declaration, so long as the Trustee
acts in good faith. Trustee shall not be personally liable for any act or omission of any person
appointed by Trustee to assist in the execution of the Trust. All persons dealing with the Trustee
shall look only to the Trust Res for the payment of their claims and every instrument to which
the Trustee shall be parties or on account of which any liability may be chargeable against the
Trust Res shall in substance so provide.
C. The Trustee shall be indemnified by and receive reimbursement from the Trust Res
against and from any and all loss, liability, expense, or damage arising out of any action or
omission to act as Trustee, except to the extent that any loss, liability, expense, or damage shall
result from the Trustee’s own willful misconduct. Any indemnity or reimbursement shall be
limited to the Trust Res, and no Beneficiary shall be personally liable to any extent.
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10. Amendment. This Declaration may be amended in any particular, except that no change may
be made in the provisions governing the liability of the Trustee, or their agents, or of the
Beneficiaries. An amendment may be considered at any meeting of the Beneficiaries provided
the notice of the meeting states that the amendment is to be considered at the meeting. The
affirmative vote of the holders of Shares entitling them to exercise three quarters (3/4) of the
voting power of the Trust shall be necessary to adopt any such amendment.
11. Miscellaneous.
A. In the event that any provision or part of this Declaration shall be deemed void or invalid
by a court of competent jurisdiction, the remaining provisions or parts shall be and remain in full
force and effect.
B. This Declaration constitutes the entire agreement between the parties hereto with respect
to the specific subject matter hereof and supersedes all prior agreements or understandings of any
kind with respect to the specific subject matter hereof.
C. This Declaration shall be governed in accordance with the laws of the State of
_____________, [Instruction: Insert State], applicable to agreements to be wholly performed
therein, with jurisdiction exclusive to the Federal and State courts located in the County of
_____________ [Instruction: Insert County], State of ______________ [Instruction: Insert
State].
IN WITNESS WHEREOF the parties have duly executed this Declaration as of the date first
written above.
TRUSTORS:
________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
TRUSTEE:
________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
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Exhibit “A”
Property
_____________________ [Instruction: Insert Existing Property to be Part of the Business
Trust]
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