Mackechnie's Trustees v. Mackechnie [1912] ScotLR 766 (21 June 1912)

Mackechnie's Trustees v. Mackechnie [1912] ScotLR 766 (21 June 1912)

The trustees' proposal to convert the business into a private limited company, with the concurrence of the widow and under terms that preserve the substance and management of the business, is a permissible continuation under the trust. The arrangement does not constitute a sale or new business, and reduces risk to the estate. The trustees are acting within their powers.

Citation
[1912] ScotLR 766
Parties
First Party: William Benson Allan and others, trustees acting under the trust disposition and settlement of the deceased John MacKechnie; Second Party: Mrs Christina MacKechnie or MacKechnie, widow of John MacKechnie; Third Party: Andrew MacKechnie, only surviving child of John MacKechnie, with consent and concurrence of John MacKechnie's trustees as his curators-nominate; Fourth Party: William Inglis Macadam, mercantile clerk, Govan, Glasgow, one of the residuary legatees under John MacKechnie's trust-disposition and settlement
Jurisdiction
Scotland
Judgment Date
21 June 1912
Procedural Posture
Special Case / Judgment on Powers of Trustees
Outcome
Question of law answered in the affirmative; trustees have power to form the business into a limited liability company as proposed.
Legal Topics
Trustee Powers, Conversion of Business, Formation of Private Limited Company, Interpretation of Wills
Trusts and Estates Company Law Trustee Powers Conversion of Business Formation of Private Limited Company Interpretation of Wills

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Parties

William Benson Allan and others, trustees acting under the trust disposition and settlement of the deceased John MacKechnie

First Party

Mrs Christina MacKechnie or MacKechnie, widow of John MacKechnie

Second Party

Andrew MacKechnie, only surviving child of John MacKechnie, with consent and concurrence of John MacKechnie's trustees as his curators-nominate

Third Party

William Inglis Macadam, mercantile clerk, Govan, Glasgow, one of the residuary legatees under John MacKechnie's trust-disposition and settlement

Fourth Party

Procedural Posture

Special Case / Judgment on Powers of Trustees

Legal Issues

  1. 1 Whether trustees have power under the will to convert the testator's business into a private limited liability company and retain trust funds therein

Ratio Decidendi

The trustees' proposal to convert the business into a private limited company, with the concurrence of the widow and under terms that preserve the substance and management of the business, is a permissible continuation under the trust. The arrangement does not constitute a sale or new business, and reduces risk to the estate. The trustees are acting within their powers.

Court Disposition

Question of law answered in the affirmative; trustees have power to form the business into a limited liability company as proposed.

Orders

  • Trustees are entitled to convert the business into a private limited liability company under the proposed terms.