Episode 49 - Understanding trusts

Business Structures in Australia: Sole Traders, Partnerships, Companies and Trusts (and Why the Trustee Matters) Melissa Bush explains that a business structure is not just a tax choice and affects asset ownership, liability, contracting, and what happens if someone resigns or dies. She outlines the differences between sole traders and partnerships (no separate legal entity and personal liability), companies (a separate ASIC-registered legal entity that can own property and enter contracts, with shareholders and directors and generally limited liability), and trusts (not a legal entity but a relationship governed by a trust deed where the trustee holds legal title and contracts on behalf of beneficiaries). She unpacks why the identity of the trustee is critical and uses a commercial lease renewal example where a husband signed personally as trustee, later resigned, and the lack of a corporate trustee created confusion that required careful evidence of the trust and trustee change; she notes a corporate trustee would have provided continuity even if directors or shareholders changed. The episode also covers constructive trusts through a family property development dispute where one person held legal title but others contributed money and labour based on an understanding of shared ownership; the court examined common intention, reliance and contributions, and unconscionability, and ultimately imposed a constructive trust to recognise a beneficial interest despite no trust deed. The key takeaways are to understand who the trustee is, consider a corporate trustee for clarity and stability, and document intentions in shared property arrangements because courts can impose trusts based on conduct, contributions and intention. 00:00 Business Structure Isn’t Just Tax: Who Signs, Who’s Liable?

01:20 Podcast Intro + Legal Disclaimer

02:28 What ‘A Business’ Legally Means (Assets, Relationships, Not an Entity)

03:24 Sole Trader vs Partnership: Personal Liability Explained

04:17 Companies: Separate Legal Entity & Limited Liability Basics

04:54 Trusts 101: What a Trust Is (and Why It’s Not a Legal Person)

06:12 Lease Renewal Case Study: When the Wrong Trustee Name Is on the Lease

07:26 Why a Corporate Trustee Matters: Continuity, Clarity, Stability

08:06 Constructive Trusts: Family Property Dispute & What Courts Look For

12:17 Key Takeaways + Next Steps (Structure, Trustees, Document Intentions)