A trust can hold shares in a private company, and many do. The complication for company secretaries is that a trust is not a legal person in South African law, so it cannot appear on a share register the way an individual or a company does. Shares owned by a trust are held and registered through its trustees, acting in their official capacity. Getting that reflected correctly in the company’s records is what keeps the shareholding valid and defensible.
This article explains how a trust is recorded as a shareholder, what the trustees, the trust deed and the Master’s letters of authority each contribute, and how testamentary and discretionary trusts fit the picture.
Why “a trust is not a person” matters
South African law is settled on the point: a trust has no legal personality. It cannot, in its own name, contract, own property, sue, be sued, or vote shares. Everything a trust does, it does through its trustees, who hold and deal with trust assets on behalf of the beneficiaries.
For a company, this has a practical consequence. A company recognises the person recorded in its securities register as the shareholder and, as a general principle, is not bound to look behind that register or to give effect to a notice of a trust. If the register does not correctly capture who holds the shares, the company cannot reliably give effect to voting, dividends, or transfers. That is why the way a trust’s shareholding is recorded matters as much as the fact of the shareholding itself.
In whose name are the shares registered?
Because the trust cannot be the registered holder, the shares are registered in the names of the trustees, in their capacity as trustees of the trust. Best practice is to name the trustees explicitly and to identify the trust they act for, rather than referring to the trust by name alone. A register entry along the lines of “A, B and C, in their capacities as trustees for the time being of the [Name] Trust” records both the natural persons who exercise the rights and the trust for whose benefit they hold the shares.
Naming the trustees explicitly is not a formality. It is what prevents later disputes about authority and keeps the shareholding defensible if it is ever litigated. It also anticipates the reality that trustees change over time while the trust, and its shareholding, continue.
What the trustees, the deed and the letters of authority contribute
Three things work together whenever a trust acquires or holds shares.
The trust deed sets out the trustees’ powers, including whether and how the trust may hold investments such as shares, and the decision-making rules the trustees must follow. The letters of authority issued by the Master of the High Court are the official confirmation that the named trustees are authorised to act for the trust; a trustee who has not been authorised by the Master cannot validly act. And a trustees’ resolution, taken in accordance with the deed, records the trustees’ decision to acquire, hold, transfer or vote the shares.
For the company secretary, this translates into a short evidence checklist when a trust comes onto, or moves within, the register: a certified copy of the letters of authority naming the current trustees, sight of the relevant provisions of the trust deed, the trustees’ resolution authorising the transaction, and identification of the trustees. Trustees generally act jointly unless the deed provides otherwise, so a resolution should reflect all authorised trustees.
Testamentary and discretionary trusts: both can hold shares in a private company
A common question is whether a testamentary trust and a discretionary trust can each hold shares in a private company. Both can. The difference lies in how the trust comes into existence and how its beneficiaries’ interests are defined, not in its capacity to be a shareholder.
A testamentary trust (also called a mortis causa trust) is created under a valid will and comes into existence on the death of the testator. Its trustees derive their mandate from the will, and they are still authorised by letters of authority from the Master before they can act, including acting as the registered holders of shares.
An inter-vivos trust is created between living persons during their lifetime. Where such a trust is discretionary, the trustees have discretion over whether, when and how much each beneficiary receives, so beneficiaries hold contingent rather than vested rights. This discretionary character does not affect the trust’s ability to hold shares, but it is highly relevant to beneficial ownership reporting, because it shapes who must be disclosed as a beneficial owner of the company.
In each case the mechanics on the share register are the same: the current trustees, properly authorised, are recorded as holding the shares for the trust.
Keeping the register current when trustees change
Because the trustees are the registered holders, a change of trustees needs to be reflected in the company’s securities register even though the underlying ownership — the trust — has not changed. When a trustee retires, is appointed, or passes away, the Master issues updated letters of authority, and the register should be updated to record the current trustees holding for the trust. Keeping this current avoids a mismatch between the people the company recognises and the people actually authorised to act.
Beneficial ownership follows close behind
Recording a trust correctly on the share register is the first step; the second is beneficial ownership. Where a trust sits in a company’s ownership chain, the company’s beneficial ownership disclosure to CIPC must look through to the natural persons connected to the trust, which for a discretionary trust can include founders, trustees and beneficiaries. We cover how to reflect trust beneficiaries, remoter descendants and multi-tier structures in a company’s filing in our dedicated guide to beneficial ownership for trusts and complex structures.
The bottom line
A trust can be a shareholder in a private company, but it holds its shares through its trustees, who must be named on the securities register in their official capacity and authorised by the Master’s letters of authority. Both testamentary and discretionary trusts can hold shares on this basis; the differences between them matter most for beneficial ownership, not for capacity. For the company secretary, the job is to record the trustees correctly, keep the entry current as trustees change, and make sure the beneficial ownership picture lines up.
For related reading, see our guides on how trust year-ends work and what the proposed Regulation of Trusts Bill could mean for trust reporting.
Intersect helps accountants and company secretaries keep share registers, director records and beneficial ownership filings accurate and connected, so that a trust on the register is captured correctly the first time and stays that way as trustees change.
This article is general information for company secretaries and compliance professionals and reflects the position as at August 2026. It is not legal advice. Confirm current requirements and your specific trust deed before acting.
