Have you ever wondered how you can preserve the mission of your business over the long term? In this episode of the Capital Insight Podcast, Jenny Kassan shares the basics of Perpetual Purpose Trusts — including what they are, how to use them, and why you might want to set one up for your company.
Let’s start with the basics: What is a Perpetual Purpose Trust?
You may have heard that Patagonia recently transferred its ownership to a Perpetual Purpose Trust (PPT), and many of our clients are choosing to do the same. A traditional trust is a legal arrangement in which someone, typically called the settlor, makes an agreement to have a trustee manage an asset on behalf of a beneficiary. Unlike a traditional trust, a PPT has no beneficiaries. Instead, a PPT requires that the trustee manage its assets to serve a purpose, which is defined in the trust legal documents.
Why you might want to set up a Perpetual Purpose Trust:
Putting a PPT in place can help preserve the mission and purpose of your company in the long run. Generally, when a company sets up a PPT, the trust acquires an ownership interest in the company with voting rights so the trust stays in control of the company, and the company must be run in a way that is consistent with the trust purpose. Jenny says: “I’m very excited about this tool because it really is the only way that you can ensure that a company stays true to its purpose over a very long period of time — into perpetuity, theoretically.”
Listen to the full episode to learn more about this topic.
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