Legal Tip 182: Beneficial Ownership of Shares on ASIC Records

Legal Tip 182: Beneficial Ownership of Shares on ASIC Records


When registering the ownership of shares in private companies with ASIC trusts are not recorded. You might recall that a trust is not a legal entity, but it is a relationship where someone owns property on behalf of others.


This means the trustee is the legal owner of the shares.


However, on ASIC forms you can nominate whether the registered owner of the shares is holding the shares in their own right, or whether as trustee. This is done by a tick boxed labelled ‘beneficially held’.

‘Beneficially held’ means the person is not acting as trustee.

If they were acting as trustee then the shares would not be beneficially held (because the beneficial owners are others).


So, check your annual ASIC statements and confirm they are correctly listed on ASIC. If they are recorded incorrectly this could lead to expensive disputes upon your death or incapacity.

 

An important factor is that the Corporations Act does not require a shareholder beneficial interest to actual be named....Its silent. So ABC Pty Ltd shares can be held by the same legal owner ie BCD Pty Ltd with two different beneficial owners. BCD Pty Ltd may be trustee for twenty nine trusts and which of the two trusts do not have to be named....The trust dies not have to be named. But can be in the member register for ABC Pty Ltd.

This principle that trusts interest may be silent in law follows into land tiles. Land titles do NOT allow a trust interest to be named or registered. This can be purposefully used to advantage.

eg If BCD Pty Ltd As trustee for Trust 1 wanted to transfer a property to Trust 2...There is no change in legal owner. Land titles would refuse the transfer in many states (not all). No duty applies. Sometimes.

 

A trust is just a relationship between 2 or more different persons. it is not a legal entity or person.

 

See a new post on this:
Legal Tip 312: How to Record Ownership of Shares in a Private Company When acting as Trustee