An organisation can be set up as a Trust under common law and the Trust Property Control Act No 57 of 1988. It is easier to set up a Trust than a section 21 company. A trust is a written arrangement between an owner and trustees. The owner hands over property and/or funds to a group of people (called trustees) who look after the property and funds and use it for the benefit of other people (called beneficiaries) for a specific objective.

Who runs a trust?

A trust is run by a Board of Trustees. A deed of Trust will say what the powers and duties are of a trust. Trustees can be paid for the work they do for the NPO.

Which laws govern trusts?

Trusts are governed by the common law and the Trust Property Control Act.

Trusts do not have a separate legal personality. If there is a legal dispute, the trustees, not the trust, can sue or be sued. The property of the Trust is protected and the Trust Property Control Act says trust property must be kept separate from the trustees’ personal property. Trusts must have their own bank accounts.

How do you form a trust?

A notary public must write and attest your trust deed and the trust must be registered with the Master of the High Court. If there are any changes to trustees at any stage, then the Master must be given notice of this.

The trust deed

The trust deed is the founding document of a trust.

Registering as a trust under the NPO Act

If a trust registers as an NPO under the NPO Act (in addition to registering with the Master of the Court) it will become a body corporate with an independent legal personality.