WYOMING STATUTORY TRUST ACT enacted in Wyoming, 1995 Session, Part 1 of 2 Section 1 of the Act, Wyoming Statutes 17-23-101 through 17-23-113 Source State of Wyoming, telnet: ferret.state.wy.us, sign on as ferret ---------------------------------------------------------------------------- ENROLLED 02/10/95 14:21:48 ORIGINAL HOUSE BILL NO. /U 0072 // ENROLLED ACT NO. 12, HOUSE OF REPRESENTATIVES FIFTY-THIRD LEGISLATURE OF THE STATE OF WYOMING AN ACT to create W.S. 17-16-1534, 17-23-101 through 17-23-121, 17-23-201, 17-23-202, 17-23-301 and 17-23-302 relating to trusts; authorizing statutory trusts; providing definitions; specifying purposes of statutory trusts, rights and liabilities of beneficial owners and trustees, proceedings involving statutory trusts, management of trusts and procedures to establish and register trusts; specifying fees and other administrative requirements for statutory trusts; providing for actions involving statutory trusts; providing for merger and other consolidation actions of statutory trusts; reserving power of state to amend or repeal provisions relating to statutory trusts; and providing for an effective date. Be It Enacted by the Legislature of the State of Wyoming: Section 1. W.S. 17-16-1534, 17-23-101 through 17-23-121, 17-23-201, 17-23-202, 17-23-301 and 17-23-302 are created to read: 17-16-1534. Applicability of chapter 24 to foreign statutory trust companies. To the extent not inconsistent with the Wyoming Statutory Trust Act, W.S. 17-23-101 through 17-23-302, a statutory trust as defined in W.S. 17-23-102(a)(v), which is organized in another jurisdiction may do business in Wyoming by complying with W.S. 17-16-1501 through 17-16-1510, 17-16-1520 and 17-16-1530 through 17-16-1532. CHAPTER 23 WYOMING STATUTORY TRUST ACT ARTICLE 1 GENERAL PROVISIONS 17-23-101. Short title. This chapter shall be known as the "Wyoming Statutory Trust Act." 17-23-102. Definitions. (a) As used in this chapter: (i) "Beneficial owner" means any owner of a beneficial interest in a statutory trust. The fact of ownership shall be determined and evidenced, whether by means of registration, the issuance of certificates or otherwise, in conformity to the applicable provisions of the governing instrument of the statutory trust; (ii) "Governing instrument" means a trust instrument which creates a statutory trust and provides for the governance of the affairs of the statutory trust and the conduct of its business. A governing instrument may: (A) Provide that a person shall become a beneficial owner and shall become bound by the governing instrument if the person, or a representative authorized by the person orally, in writing or by other action such as payment for a beneficial interest, complies with the conditions for becoming a beneficial owner set forth in the governing instrument or any other writing and acquires a beneficial interest; and (B) Consist of one (1) or more agreements, instruments or other writings and may include or incorporate bylaws containing provisions relating to the business of the statutory trust, the conduct of its affairs and its rights or powers or the rights or powers of its trustees, beneficial owners, agents or employees. (iii) "Other business entity" means a corporation, a partnership, a limited partnership, a limited liability company, a common-law trust or any other unincorporated business, excluding a statutory trust; (iv) "Person" means a natural person, partnership, limited partnership, limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity; (v) "Statutory trust" means an unincorporated association which: (A) Is created by a trust instrument under which property is or will be held, managed, administered, controlled, invested, reinvested or operated, or business or professional activities for profit are carried on or will be carried on, by a trustee or trustees for the benefit of a person who is or may become entitled to a beneficial interest in the trust property, including but not limited to a trust of the type known at common law as a "business trust," "Massachusetts trust," a trust qualifying as a real estate investment trust under sections 856 through 859 of the United States Internal Revenue Code of 1986, as amended, or under any successor provision, or a trust qualifying as a real estate mortgage investment conduit under section 860D of the United States Internal Revenue Code of 1986, as amended, or under any successor provision; and (B) Files a certificate of trust pursuant to W.S. 17-23-114. Any association meeting the definition of this paragraph whether organized before or after the effective date of this chapter shall be a statutory trust and a separate legal entity. (vi) "Trustee" means the person or persons appointed as a trustee in accordance with the governing instrument of a statutory trust, and may include the beneficial owners or any of them. 17-23-103. Purpose. Statutory trusts may be organized under this chapter for any lawful purpose, except insurance or acting as a financial institution as defined by W.S. 13-1-101(a)(ix) or its successor statute, whether or not conducted for profit, or for any of the purposes referred to in W.S. 17-23-102(a)(v)(A) including, without limitation, for the purpose of holding or otherwise taking title to property, whether in an active or custodial capacity. 17-23-104. Contributions by beneficial owners. (a) A contribution of a beneficial owner to the statutory trust may be in cash, property or services rendered, or a promissory note or other obligation to contribute cash or property or to perform services. A person may become a beneficial owner of a statutory trust and may receive a beneficial interest in a statutory trust without making a contribution or being obligated to make a contribution to the statutory trust. (b) Except as provided in the governing instrument, a beneficial owner is obligated to the statutory trust to perform any promise to contribute cash, property or to perform services, even if the beneficial owner is unable to perform because of death, disability or any other reason. If a beneficial owner does not make the required contribution of property or services, the beneficial owner is obligated at the option of the statutory trust to contribute cash equal to that portion of the agreed value, as stated in the records of the statutory trust, of the contribution that has not been made. The cash contribution shall be in addition to any other rights, including the right to specific performance, that the statutory trust may have against the beneficial owner under the governing instrument or applicable law. (c) A governing instrument may provide that the interest of any beneficial owner who fails to make any contribution that he is obligated to make shall be subject to specific penalties or consequences for the failure. The penalty or consequence may take the form of: (i) Reducing or eliminating the defaulting beneficial owner's proportionate interest in the statutory trust; (ii) Subordinating his beneficial interest to that of nondefaulting beneficial owners; (iii) A forced sale of his beneficial interest; (iv) Forfeiture of his beneficial interest; (v) The lending by other beneficial owners of the amount necessary to meet his commitment; (vi) Fixing of the value of his beneficial interest by appraisal or by formula and redemption or sale of his beneficial interest at that value; or (vii) Any other penalty or consequence. 17-23-105. Liability of beneficial owners and trustees. (a) Except to the extent otherwise provided in the governing instrument, the beneficial owner shall be entitled to any limitations of personal liability extended to shareholders of private corporations for profit organized under the Wyoming Business Corporation Act or extended to members of limited liability companies organized under the Wyoming Limited Liability Company Act. (b) Except to the extent otherwise provided in the governing instrument, a trustee, when acting in that capacity, shall not be personally liable to any persons other than the statutory trust or a beneficial owner for any act, omission or obligation of the statutory trust or any trustee. Notwithstanding the provisions of W.S. 17-23-113, trustees of a statutory trust shall not be held to a more rigorous standard of care than that imposed upon directors of a business corporation under the Wyoming Business Corporation Act. 17-23-106. Legal proceedings. (a) A statutory trust may sue and be sued in its own name, and service of process upon any one (1) of the trustees or upon the registered agent shall be sufficient. A statutory trust may be sued for debts and other obligations or liabilities contracted or incurred by the trustees, or by the duly authorized agents of the trustees, in the performance of their respective duties under the governing instrument of the statutory trust, and for any damages to persons or property resulting from the negligence of the trustees or agents acting in the performance of their respective duties. The property of a statutory trust shall be subject to attachment and execution pursuant to the Wyoming Code of Civil Procedure, as if it were a corporation. (b) Notwithstanding the provisions of subsection (a) of this section, in the event that the governing instrument of a statutory trust which is a registered investment company under the Investment Company Act of 1940, as amended, creates one (1) or more series as provided in W.S. 17-23-108(b)(ii), the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series shall be enforceable against the assets of that series only, and not against the assets of the statutory trust generally if: (i) Separate and distinct records are maintained for the series; (ii) The assets associated with the series are held and accounted for separately from the other assets of the statutory trust, or any other series of that trust; and (iii) The governing instrument so provides, and notice of the limitation on liabilities of a series as referenced in this subsection is set forth in the certificate of trust of the statutory trust. (c) A trustee of a statutory trust may be served with process in the manner prescribed in subsection (d) of this section in all civil actions or proceedings brought in this state involving or relating to the activities of the statutory trust or a violation by a trustee of a duty to the statutory trust, or any beneficial owner, whether or not the trustee is a trustee at the time suit is commenced. Every resident or nonresident of the state who accepts election or appointment or serves as a trustee of a statutory trust shall, by the acceptance or service, have consented to the appointment of the registered agent of the statutory trust required by W.S. 17-23-109 as that person's agent upon whom service of process may be made as provided in this section. Any process served in accordance with this section shall be of the same legal force and validity as if served upon the trustee within the state and the appointment of the registered agent shall be irrevocable. (d) Service of process shall be effected by serving a Wyoming trustee or registered agent of the statutory trust required by W.S. 17-23-109, with one (1) copy of the process in the manner provided by law for service of process. (e) In the governing instrument or other writing, a trustee may consent to be subject to the nonexclusive jurisdiction of the courts of, or arbitration in, a specified jurisdiction, or the exclusive jurisdiction of the courts of, or the exclusivity of arbitration in, this state, and to be served with legal process in the manner prescribed in the governing instrument or other writing. (f) Nothing in this section limits or affects the right to serve process in any other manner provided by law. This section is an extension of and not a limitation upon the right otherwise existing of service of legal process upon nonresidents. (g) A partnership, limited partnership, corporation, limited liability company or other nonnatural person formed or organized under the laws of any foreign country or other foreign jurisdiction or the laws of any state other than the state of Wyoming shall not be deemed to be doing business in the state solely by reason of its being a trustee of a statutory trust. 17-23-107. Rights of beneficial owners in trust property. (a) Except to the extent otherwise provided in the governing instrument, a beneficial owner shall have an undivided beneficial interest in the property of the statutory trust and shall share in the profits or losses of the statutory trust in the proportion of the entire undivided beneficial interest in the statutory trust he owns. The governing instrument of a statutory trust may provide that the statutory trust or the trustees, acting for and on behalf of the statutory trust, shall be deemed to hold beneficial ownership of any income earned on securities of the statutory trust issued by any business entities formed, organized or existing under the laws of any jurisdiction, including the laws of any foreign country. (b) No creditor of the beneficial owner shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the statutory trust. (c) A beneficial owner's beneficial interest in the statutory trust is personal property notwithstanding the nature of the property of the trust. Except to the extent otherwise provided in the governing instrument, a beneficial owner has no interest in specific statutory trust property. (d) Except to the extent otherwise provided in the governing instrument, the transferee of a beneficial owner's beneficial interest in the statutory trust shall only be entitled to receive the share of profits and the return of contributions to which the beneficial owner otherwise would be entitled. In the absence of the unanimous written consent of the owners of all other beneficial interests and of all trustees of the statutory trust, and except to the extent otherwise provided in the governing instrument, a transferee of a beneficial owner's beneficial interest shall have no right to participate in, be kept apprised of the affairs of the statutory trust or to become a beneficial owner of a beneficial interest in the statutory trust. (e) Except to the extent otherwise provided in the governing instrument, at the time a beneficial owner becomes entitled to receive a distribution, he has the status of, and is entitled to all remedies available to, a creditor of the statutory trust with respect to the distribution. A governing instrument may provide for the establishment of record dates with respect to allocations and distributions by a statutory trust. 17-23-108. Management of statutory trust. (a) The business and affairs of a statutory trust shall be managed by or under the direction of its trustees. To the extent provided in the governing instrument, any person, including a beneficial owner, shall be entitled to direct the trustees in the management of a statutory trust. Except to the extent otherwise provided in the governing instrument, neither the power to give direction to a trustee nor the exercise thereof by any person, including a beneficial owner, shall cause the person to be a trustee. (b) A governing instrument may contain any provision relating to the management of the business and affairs of the statutory trust, and the rights, duties and obligations of the trustees, beneficial owners and other persons, which is not contrary to any provision or requirement of this chapter and, without limitation may: (i) Provide for classes, groups or series of trustees or beneficial owners, or classes, groups or series of beneficial interests, having the relative rights, powers and duties as the governing instrument may provide, and may make provision for the future creation in the manner provided in the governing instrument of additional classes, groups or series of trustees, beneficial owners or beneficial interests, having such relative rights, powers and duties as may be established, including rights, powers and duties senior or subordinate to existing classes, groups or series of trustees, beneficial owners or beneficial interests; (ii) Establish or provide for the establishment of designated series of trustees, beneficial owners or beneficial interests having separate rights, powers or duties with respect to specified property or obligations of the statutory trust or profits and losses associated with specified property or obligations, and, to the extent provided in the governing instrument, any designated series may have a separate business purpose or investment objective; (iii) Provide for the taking of any action, including the amendment of the governing instrument, the accomplishment of a merger or consolidation, the appointment of one (1) or more trustees, the sale, lease, exchange, transfer, pledge or other disposition of all or any part of the assets of the statutory trust or the assets of any series, or the dissolution of the statutory trust, or may provide for the taking of any action to create under the provisions of the governing instrument a class, group or series of beneficial interests that was not previously outstanding, in any such case without the vote of or approval of any particular trustee or beneficial owner, or class, group or series of trustees or beneficial owners; (iv) Grant to, or withhold from, all or certain trustees or beneficial owners, or a specified class, group or series of trustees or beneficial owners, the right to vote, separately or with any other classes, groups or series of the trustees or beneficial owners, on any matter, with voting being on a per capita, number, financial interest, class, group series or any other basis; (v) To the extent that voting rights are granted under the governing instrument, set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on, waiver of any notice, action by consent without a meeting, the establishment of record dates, quorum requirements, voting in person, by proxy or in any other manner, or any other matter with respect to the exercise of any right to vote; (vi) Provide for the present or future creation of more than one (1) statutory trust, including the creation of a future statutory trust to which all or any part of the assets, liabilities, profits or losses of any existing statutory trust will be transferred, and for the conversion of beneficial interests in an existing statutory trust, or series thereof, into beneficial interests in the separate statutory trust, or series thereof. (c) To the extent that, at law or in equity, a trustee has duties, including fiduciary duties, and liabilities relating to a statutory trust or to a beneficial owner: (i) Any trustee acting under a governing instrument shall not be liable to the statutory trust or to any beneficial owner for the trustee's good faith reliance on the provisions of the governing instrument; and (ii) The trustee's duties and liabilities may be expanded or restricted by provisions in a governing instrument. 17-23-109. Registered office and registered agent to be maintained. (a) Each statutory trust shall have and continuously maintain in this state: (i) A registered office which may be the same as its place of business; (ii) A registered agent, which may be either an individual resident in this state whose business office is identical with the registered office, or a domestic corporation, limited liability company or statutory trust or a foreign corporation authorized to transact business in this state, having a business office identical with the registered office. 17-23-110. Change of registered office or registered agent. (a) A statutory trust may change its registered office or agent, or both, upon filing in the office of the secretary of state a statement setting forth: (i) The name of the statutory trust; (ii) The street address of its then registered office; (iii) If the street address of its registered office is to be changed, the new address; (iv) The name of its then registered agent; (v) If its registered agent is to be changed, the name of its successor registered agent; (vi) That the address of its registered office and the address of the business office of its registered agent, as changed, will be identical; (vii) That the change was authorized by the trustee of the statutory trust. (b) The statement shall be signed and delivered to the secretary of state. If the secretary of state finds that the statement conforms to the provisions of this chapter, he shall file the statement. (c) Any registered agent of a statutory trust may resign as agent upon filing a written notice, signed with one (1) original and one (1) exact or conformed copy, with the secretary of state, who shall forthwith mail a copy to the statutory trust at its principal mailing address as defined and prescribed by the secretary of state. The appointment of the agent shall terminate upon the expiration of thirty (30) days after receipt of notice by the secretary of state. 17-23-111. Failure to maintain registered agent or registered office or pay annual fee. If any statutory trust has failed for thirty (30) days to appoint and maintain a registered agent in this state, or has failed for thirty (30) days after change of its registered office or registered agent to file in the office of the secretary of state a statement of the change, or has failed to pay the fee required by W.S. 17-23-117, it is transacting business within this state without authority and shall forfeit any franchises, rights or privileges acquired under the laws of this state. The forfeiture shall be made effective in the following manner. The secretary of state shall mail by certified mail a notice of its failure to comply. Unless compliance is made within thirty (30) days of the delivery of notice, the statutory trust shall be deemed defunct and to have forfeited its certificate of organization acquired under the laws of this state. Any defunct statutory trust may at any time within one (1) year after the forfeiture of its certificate, be revived and reinstated, by filing the necessary statement under this chapter and paying the prescribed fee, together with a penalty of one hundred dollars ($100.00). 17-23-112. Existence of statutory trust. (a) Except to the extent otherwise provided in the governing instrument, the statutory trust shall have perpetual existence. (b) Except to the extent otherwise provided in the governing instrument, the death, incapacity, dissolution, termination or bankruptcy of a beneficial owner shall not result in the termination or dissolution of a statutory trust. 17-23-113. Applicability of trust law. Except to the extent otherwise provided in the governing instrument or in this chapter, the laws of this state pertaining to trusts are hereby made applicable to statutory trusts. A statutory trust complying with the provisions of this chapter shall not be considered a financial institution as defined in W.S. 13-1-101(a)(ix). ------------ End of Part 1 of 2 -- John DeBruyn, Denver, Colorado, The Mile High City, USA (jdebruyn@usa.net) -- John DeBruyn, Denver, Colorado, The Mile High City, USA (jdebruyn@usa.net)