The Resurgence of 'Uncorporation': The Business Trust in Singapore

Abstract

The business trust has enjoyed resurgence in Singapore following the enactment of the Business Trusts Act. In March 2011, a high profile initial public offering in Singapore involving a business trust raised a staggering US $5.5 billion making this one of the world’s largest initial public offering of the year. Further, Hong Kong telecommunication company, PCCW Ltd has also offered a business trust via a stapled security structure in November 2011. Yet the business trust is not widely understood by many lawyers. Thus, one of the aims of this paper is to provide a description of the business trust as it exists in Singapore. Beyond providing a mere descriptive account of the business trust, this paper also seeks to respond to the invitation of a leading trust scholar to study the business trust as a mode of business organisation which includes inter alia an examination of the following areas: (1) the rise of the statutory trust as a form of business organisation; and (2) an examination of why the business trust persists even though there are other forms of business organisation such as the corporation. This paper will consider both these questions in the context of Singapore’s Business Trusts Act.

Keywords: trust, equity, business trust, Singapore

JEL Classification: K11