Question
How to prepare a transfer of units?
Note: Please refer to the end of this article if you do not have the Trust Register enabled.
Answer
Depending on the rules of the underlying Trust Deed of the Trust, a unitholder may transfer units to another unitholder or third party with the trustee’s consent, subject to the "pre-emption" rights of current unitholders (see below).
To start this process, click on "Transfer of Units" under the "Unitholders" heading.
You will then be redirected to the Unit Transfer document form, which is pre-filled with relevant data that has been added or imported into the Trust profile. You will need to complete any data fields that have not been pre-filled - these will be highlighted in pink.
You cannot submit the document form until all relevant data fields are completed.
On the first page of the document form, you will be asked for the clause number in relation to pre-emption rights.
A pre-emption right is a contractual right, to acquire any units a unit holder wishes to transfer, held by current unitholders - i.e. the other, current unitholders have the first right to acquire those units pro rata and only if they do not want to acquire some or all of the units can they be sold to a third party.
Next, provide the date of the unit transfer.
In relation to the transferor (seller) details, you will be prompted to provide the following details:
- Allotment: this is a drop-down which shows the current unitholders and allotments related to each unitholder
- Number: State the number of units that are going to be transferred
- Consideration paid: the amount to be received in relation to the transfer
In relation to the buyer (transferee), you will be prompted to provide the following details:
- Name: a dropdown will appear listing the current unitholders, as well as an option to select ‘new unitholder’. If ‘new unitholder’ is chosen, you will be prompted to provide their details.
- Class: if there is only one class held by the unitholder, the unit class will automatically default to that class. Otherwise, you will need to select the appropriate class.
- Number: if the number does not match the number to be transferred as disclosed in the previous tab, it will be highlighted in pink as a prompt to reconcile.
An estimate screen will then appear outlining the updated position of the unitholding across current and new unitholders.
You will then be prompted to select how you wish the unit certificates to be reconciled. You can either:
- Consolidate unit holdings and cancel existing Certificates or
- Create separate Certificates for newly received unit holdings.
After submitting the details, the relevant documentation will appear on the ‘collaboration page’:
- Transfer of Units, which includes:
- Director / Trustee resolution
- Unit Transfer
- Unit Certificate(s)
- Register of Unitholders
- Standard Transfer Form
Once the ‘Transfer of Units’ documents has been signed by the client, you will need to either change the status on the collaboration page (‘Paper signing’ option) or the Trust Profile (Mark as Signed’ options).
In changing the status to 'signed', the following areas of the Trust Profile will then reflect the change of unitholders and issue of units:
Timeline
Timeline is a visual representation of documentation produced on the Trust Register that has been manually uploaded. It is displayed by date order. By clicking on any of the PDF documents you can view, download or print, as required.
Units Register
The units register will be updated to reflect the:
- Transfer of units between transferor and transferee.
- Unitholders and details of the unit holdings.
- Unit transactions.
Main Trust Profile
The main Trust profile will also be automatically updated to reflect the change in unitholders and unit holdings.
Note: If you do not have the Trust Register enabled:
- You may use the templates i.e. Annexures A, B and C provided at the end of the NowInfinity Unit Trust establishment document; or
- Contact legal@nowinfinity.com.au to be referred across to our legal service provider who can assist on a fee-for-service basis.