What are the types of trust business?

Designated Trust Funds Business

Designated Trust Funds refers to the designation of the scope of operation of the trust funds by the settlor when he/she delivers the funds to the trustee. Currently, the following types of business are available:

(1) Individual Instruction: A trust contract is signed between the settlor and the trust institution, whereby the settlor instructs the use of the trust funds on an individual basis, and the settlor pays the settlor a trust fee or other related expenses in accordance with the contract.

(2) Appointment of foreign fund managers: The principal signs a trust contract with the trust institution and appoints a specific foreign fund manager to handle the application of funds, and the trustee usually signs a contract with the foreign manager and custodian in advance. The trustee will usually contract with a foreign manager and custodian in advance. The trustee shall bear the domestic trust fee and the foreign fund manager and custodian fee.

(3) Appointment to invest in domestic and foreign funds on behalf of the trustee: The principal signs a trust contract and appoints the trustee (trust organization) to invest in domestic or foreign funds on behalf of the trustee, and the principal shall bear the costs of fund subscription, redemption and other expenses, as well as pay the trustee's trust operation and management fees.

Securities investment trust business

Securities investment trust is based on the principle of crisis diversification, where people with expertise and experience utilize the funds of an unspecified majority of investors to invest in securities in order to obtain capital gains or dividend income. The securities investment trust business refers to the business of operating the following businesses:

-Issuing beneficiary certificates to raise securities investment trust funds;

-Using securities investment trust funds to engage in the investment of securities and their related commodities;

-Accepting discretionary entrustment from clients;

-Other related businesses approved by the People's Bank of China.

The current types of securities investment trusts include:

-Common stock fund: all or most of the fund's assets are invested in common stocks.

-Bond and Preferred Stock Fund: All or most of the fund's assets are invested in bonds or preferred stocks with stable interest rates for the sake of stability.

-Balanced fund: The fund's assets are diversified among common stocks, preferred stocks and a variety of bonds.

-Money market funds: The fund's assets are utilized mainly in high-yielding short-term instruments in the money market, such as treasury bills, commercial paper, and bank certificates of deposit.

-Growth funds: aim to pursue the proceeds of the upside benefits of buying and selling securities.

-Income Funds: aiming to obtain dividend income, etc.

Property Rights Trust

-Management Buyout (MBO)

MBO (Management Buyout) is an acquisition in which the management or managerial level of a target company finances the purchase of shares of the company, thereby changing the ownership structure, controlling interest and asset structure of the company, and thus achieving the reorganization of the target company and obtaining the expected returns.

MBO trust is the implementation of MBO program through the trust, the trust enterprise to provide program design, financing, equity management and other services.

-Employee Stock Ownership Trust (ESOP)

The ESOP is formed by the employees of the same enterprise for the purpose of acquiring and managing their own shares, and a fixed amount of money is deposited monthly from the salary of the employees who join the ESOP (both principal and beneficiaries), plus a certain percentage of incentive payments from the enterprise, which is also paid to the trustee (the trustee organization), and a representative of the ESOP signs a trust agreement with the trustee on behalf of all the members. On behalf of all members, the employee stockholders' association representative signs a trust contract with the trustee. Due to the large number of trustees in the Employee Stock Ownership Trust, the trust funds allocated each month are pooled and utilized in a separate operation and management manner, with the purpose of regularly investing in the acquisition of shares of the companies served by the trustees, and pursuing stable remuneration by investing in batches and decentralizing the crisis. This business has been well received by both employers and employees as it helps employees accumulate wealth through long-term savings and investment.

-Equity Trust

It refers to the transfer of the equity of an enterprise held by the principal to the trustee, or the entrustment of the funds legally owned by the principal to the trustee, and the trustee, in its own name and in accordance with the wishes of the principal, will be directed to invest the funds in a certain enterprise, and the proceeds of the trustee due to the holding of shares of a certain enterprise are attributed to the beneficiaries, i.e., the principal himself/herself or other persons designated by the principal. The beneficiary is the principal himself or another person designated by the principal. The conditions under which the beneficiaries can obtain the income are determined by the principal. In an equity trust, if the beneficiary is an employee or operator of the enterprise, it is called an employee shareholding trust or operator shareholding trust.

Equity trusts can resolve irregularities in corporate equity incentives in a fiduciary manner and act as a professional consulting organization to advise on corporate equity incentive programs.

-Debt trust

Debt trust is a trust business that takes financial enterprises and other enterprises with large amount of debts as the trustees, and takes the large amount of debts that the trustees can hardly or have no time to recover as the subject of the trust. Through the professional management and operation of the trustee, it realizes the revitalization and realization of trust assets and strives to maximize the value preservation and appreciation of trust assets.

-Mortgaged Corporate Bond Trust

It is a kind of external property operation and management behavior in which the creditor of the corporate bond trusts the security right on the physical assets which are the collateral of the bond issuance to the trust enterprise, and the trust enterprise operates, manages and exercises the security right for the benefit of the beneficiaries, i.e., all the bond creditors.

-Voting Rights Trust

The voting rights trust, also known as a business management trust, is a type of portfolio management trust, in which the shareholders of a company transfer their shares as trust property to a trustee for the period of the trust, based on the voting rights trust contract signed between the shareholders and the trustee, so that the trustee can centrally exercise the voting rights on the shares. It is characterized by the separation of two important powers possessed by the shareholders (the right to receive dividends and dividends and the right to participate in the management of the enterprise and to exercise voting rights) and their separate use. The original shareholders enjoy all rights except the right to vote. The trustee exercises voting rights on behalf of the shareholders during the term of the trust, keeps the shares, handles business affairs, and transfers dividend income on behalf of the shareholders.

Leasing Trust Business

Leasing is the rental of other people's objects. Modern leasing is mainly for equipment leasing, the enterprise in order to implement the equipment investment and leasing enterprises to lease the required equipment, leasing enterprises on behalf of the financing, and according to the requirements of the lessee enterprise to supply manufacturers to purchase the appropriate equipment delivered to the lessee after the use of the lessee, the lessee enterprise needs to pay rent on a regular basis. At the end of the lease period, the lessee enterprise can have the option to stop leasing, renew leasing or retain the purchase of equipment. Modern leasing is a collective term for the act of renting, lending and leasing contracts.

Modern equipment leasing is concentrated in the following areas: aircraft, automobiles, computers, wireless communication facilities, furniture, industrial machinery and equipment, medical equipment, office supplies, train cars, trucks and waste disposal facilities. Modern leasing has progressed into the financing (hardware) and consulting, maintenance (software) of a package of integrated services industry, so more flexible and convenient, more adaptable to the various needs of users.

Leasing trust business immediately the following forms:

1, financial leasing. It refers to when the enterprise needs to purchase equipment, the enterprise is not to the financial institutions directly apply for loans to buy equipment, but entrusted to the leasing enterprise according to the requirements of the enterprise and the choice of the equipment purchased on behalf of the enterprise, and then the enterprise in the form of leasing to the leasing enterprise leasing equipment, so as to enable the enterprise to achieve the purpose of financing funds.

2, operational leasing. Also known as operational leasing, refers to all other forms of leasing other than financial leasing. It refers to when the enterprise needs to use the equipment for a short period of time, can be taken to the leasing enterprise short-term leasing equipment, and leasing enterprises to provide maintenance and other after-sales service, this is a non-cancelable, incomplete payment of short-term leasing business.

3, tax-saving lease. It refers to, this lease in the tax can really enjoy the treatment of the lease, that is, the lessor is eligible for accelerated depreciation and input tax breaks and other tax incentives, and in the form of lower rents to the lessee to transfer part of its tax benefits, and the lessee used to finance the equipment leased into less than the loan purchase into.

4, sales-type lease. Also known as non-tax-saving lease. This type of lease is usually treated as an installment transaction in the tax laws of countries that consider leasing on a tax basis.

5. Leveraged leases. Also known as a balanced lease, it is a "financial leverage" approach to the composition of the financial tax-saving lease, the lessor generally only need to pay the amount of all the equipment, 20% -40%, you can economically (and only economically) have ownership of the equipment, enjoy the same tax treatment as a 100 percent investment in the equipment. Equipment into most of the funds through the rental of equipment as collateral, by banks, insurance companies and securities companies and other financial institutions to solve the loan, the lender to the credit to the lessor of the non-recourse, the funds to repay the security lies in the equipment and lease payments, while the lessor of the equipment to be the first mortgage, lease contracts and rentals as a right to the security of the loan.

6, direct leasing. Direct leasing is the practice of purchase and lease, that is, the lessor with the funds raised in the capital market, to the manufacturer to pay the loan, the purchase of equipment leased directly to the user (lessee).

7, sublease. Subleasing is the practice of renting in and renting out, i.e., by the lessor from a leasing company or from the manufacturer to rent a piece of equipment and then sublease it to the user.

8, after-sale leasing. Refers to the equipment owner will own part of the assets (such as equipment, housing, etc.) sold to the leasing enterprise, and then leased back from the leasing enterprise practice. This is when the enterprise lack of funds, in order to improve its financial situation and take a very favorable practice for the enterprise.

Enterprise Trust Business

Enterprise Trust refers to the transfer of part or all of the property rights of the enterprise legal person in the form of a contract, i.e., as the principal of the enterprise property rights of the corporate body, through a certain contract specification, within a certain period of time and under certain conditions of part or all of the property of the enterprise legal person to the trustee to realize the property management right and the disposal of the right of the transfer of the conditional, and in this way to achieve the preservation of the value of the enterprise assets, value-added purpose. The purpose of enterprise assets preservation and appreciation. Enterprise trusteeship belongs to the category of financial trust in nature, the difference is that the trusteeship function focuses on the management and disposal of the enterprise's claims and property rights, and its direct purpose is to effectively realize the preservation and appreciation of assets. In the economic relations of financial trust, trusteeship is concluded through the contract form of trust relations, reflecting a special economic relations, that is, the relationship between the parties in the trusteeship relationship. As far as the current situation in China is concerned, the key contents and specific ways of trusteeship can be summarized as follows:

-Accepting the entrustment of the state-owned assets management department or input institution, and deciding on the relevant asset reorganization or disposal of the trusteeship enterprise with the prerequisite of guaranteeing the preservation of value of the trusteeship state-owned assets and value-addedness within a certain period of time;

-Performing according to the conditions and ways as agreed by the contract, and in the validity of the trustee's term, the trustee shall obtain the assets in stages, and the trustee shall obtain the assets in stages.

-The trustee shall, under the conditions and in the manner agreed in the contract, obtain the right to dispose of the relevant assets of the entrusted party in stages, and ultimately realize the change or elimination of the legal entity of the entrusted assets;

-The trustee accepts the entrustment of the entrusted party under the agreed conditions and carries out the operation and management of the entrusted property, and acts as an agent, sells or auctions;

-The trustee, under the condition of accepting the whole or a part of the debts of the entrusted enterprise and the obligation of employee resettlement, shall be transferred to the enterprise concerned without any compensation;

-The trustee accepts the creditor's claims on agreed terms and enables the creditor to realize or improve the creditor's claims with the corresponding operation. The specific modes of enterprise trusteeship immediately include: entrusted agent mode, crisis gold mortgage mode, option mode and repurchase mode.