Energy Or Royalty Trust
Updated on March 6, 2023
An energy or Royalty trust is a kind of business entity or financing business which invests in assets such as oil, gas, natural substances like coal mines and other minerals. These are generally active in Canada. The larger share of profits generated from these resources are distributed to investors. Energy or royalty trusts do not invest in stocks or other financial assets.
Energy Trust Explained
The energy trust is established as the primary limited partnership. The trust is active till the time these companies are operational and continue producing. The members or unitholders of the trust receive money depending on royalties paid by the companies on a monthly basis, or as per the terms.The trust is dissolved as soon as the production stops or the natural resource is depleted. Royalty trusts promise better than market returns to the investors. These natural resources are considered quick cash producing assets and thus these trusts largely attract energy companies easily.