Discover the power and flexibility of Bare Trusts on Cake, one of our favourite features to date!
N.B. Bare Trusts are exclusively available on Cake's Pro plan. Get in touch with the team via the chat 💬 for a quick quote to upgrade!
This article explains what Bare Trusts are and how they can empower ownership arrangements. Learn how to set up your Bare Trust in Cake and explore three key features that seamlessly integrate with this trust structure: exercising stock options, issuing shares to shareholders through a holding company, and facilitating share transfers.
Understanding Bare Trusts ✨🔑
Bare Trusts, also known as simple trusts or nominee trusts, empower ownership and flexibility. In a Bare Trust, the trustee holds assets on behalf of the beneficiary. The beneficiary retains both the capital and income generated by the trust's assets. The trustee's role is minimal, as the beneficiary maintains beneficial ownership and control.
For further information on Bare Trusts, check out this guide!
How to Set Up Your Bare Trust in Cake 🏗️💼
Go to the Ownership tab from the main menu and select Cap table from the dropdown menu.
Navigate to Shareholders from the top menu.
Click + Add Bare trust.
Enter the trust name and trustee details, specifying if it's an individual, joint, or corporate trustee.
Fill in the remaining fields for the trustee, then click "Create trust" at the bottom of the editing wizard.
Exercising Stock Options into the Bare Trust 💪💼
When exercising stock options, select "Exercise into Bare trust" in Cake.
Choose the holding company that the employee will be a beneficiary of.
The shares will be issued to the holding company on your Cap Table.
Access the holding company on your Cap Table to view individual beneficial holdings.
Issuing Shares to Shareholders through a Bare Trust 📈🏢
While issuing shares through your Cap Table (see Equity -- Shares / Shareholders), click into the Advanced Settings.
Select the holding trust from the dropdown menu.
The shares will be issued to the holding company on your Cap Table.
Access the holding company to view individual beneficial holdings. You can also choose to add beneficiaries directly within the newly created trust by clicking Add beneficiaries and this will allow you to issue shares directly through the company.
Facilitating Share Transfers with Bare Trusts 🔄💼
When adding a historical share transfer, check the tickbox for "Transfer into a bare trust."
The transferor should be added into the 'From shareholder' field, and the beneficiary should be added into the 'To shareholder' field.
Search for the relevant holding company/trust in which the transferee will be a beneficial holder and finalise the transfer details.
Should you have any questions or need further assistance, feel free to reach out to the Cake support team through the chat 💬 for guidance and support.
