What is a trust

A trust is one of the forms of a monopolistic association of enterprises, in which all participants included in it lose their production, financial and legal independence and are subject to a single management. In this case, the profit is distributed in accordance with the equity participation of its enterprises. In connection with this circumstance, the trust is considered to be the predecessor of such associations as a holding and a concern.

Instruction manual

1

In the USSR, self-financing associations of enterprises of the same industry were called trusts in order to maintain a normal level of production and ensure their economic life. At present, in our country, the term "trust" is applied to construction and assembly associations (construction and trusts).

2

From an economic point of view, a trust is the closest form of business combination, as they lose their independence and become a division of the trust. Management manages the trust from a single center.

3

A trust as a type of business combination has distinctive features: - a trust is the toughest form of all forms of enterprise integration; - with this form of association, all aspects of the enterprise’s activities are integrated (financial, economic, legal, industrial, etc.); - the trust is distinguished by production uniformity of activity. In this connection, his specialization in the production of one or several similar types of products is noted; - all enterprises united in a trust are subordinate to one center, which carries out operational management of both the production complex and the service and sales enterprises.

4

Trust as a form of association is very convenient for the organization of combined production. That is, enterprises of different industries are integrated into one company, which are elements of the same technological cycle or play an auxiliary role in relation to each other.

5

There are currently many tests in each country. Most of them are focused on those areas that are able to create large profits. There are trusts for mining and gold, oil, real estate construction. We can observe the likeness of a trust in the markets, when one entrepreneur acquires several places and on their basis begins to build his business.