Sometimes an enterprise is neither a corporation nor a partnership, but a trust. The usual method of forming a trust is to have the owners of the enterprise sign an agreement transferring their rights to one or more individuals, called trustees, who then proceed to exercise these rights and conduct the affairs of the business for the period of time stated in the trust agreement.
The advantage of this arrangement is that the trustees can exercise full power during the term of the trust without fear of being unseated by disgruntled owners before they have had time to make a showing. Where two or more business are to be combined under one control, the trust device is effective. In order not to be subject to the antitrust laws, however, expert legal counsel is highly desirable. The trustees have responsibilities similar to those of directories within the limits of the trust management that creates the trust. Because the owners are thus giving up control of their business, the trust agreement should be carefully drawn and should provide for regular reports to the owners, as well as a stated time for its termination.
Trustee certificates are issued to owners as evidence of their participation in the trust; these certificates are quasi-negotiable, the same as stock certificates; that is, they may be transferred from on person to another.