Suing a Corporate Trustee Private companies are separate legal persons at law. Companies are not the directors or shareholders behind them. Even where there is a company with 1 shareholder who is also a director the company that company is a separate person to the director. Companies can enter into contracts just like a person can. They can be sued in contract or in negligence just like a person can too. Liability of a company generally is restricted to the company. The directors of the company are not liable for the company debt, except in 2 circumstances because of legislation that makes them personally liable (such as trading while insolvent), and/or Because of contract law - they agreed to make themselves liable for company debts by given a personal guarantee for example. So where a trust is being set up it is a good idea to arrange for a company to act as trustee. This is very important where there will be a business operated, and is also important for where the trust will hold assets which carry risk. Real Estate carries a certain amount of risk as the owner of the property can be sued by tenants and others entering the property. So where there is any risk having a corporate trustee can limit the liability to the company which is acting as trustee. If the trust is sued it will be the trustee that cops it - see my previous legal tip. This is why the trustee should not own any other property other than trust property. The company will be a $2 company with no assets set up only to operate as trustee. The assets of the trust will still be at risk though.