{"data":{"id":"us-ky/krs-386a.1-030","jurisdiction":"us-ky","citation":"KRS 386A.1-030","heading":"Governing instrument.","body":"(1) Except as otherwise provided in KRS 386A.1 -040(2), the governing instrument\ngoverns:\n(a) The management, affairs, and conduct of the business of a statutory trust; and\n(b) The rights, interests, duties, obligations, and powers of, and the relations\namong, the trustees, the beneficial owners, the statutory trust, and other\npersons.\n(2) To the extent the governing instrument does not otherwise provide for a matter\ndescribed in subsection (1) of this section, this chapter governs the matter.\n(3) The governing instrument may include one (1) or more instruments, agreements,\ndeclarations, bylaws, or other records and refer to or incorporate any record.\n(4) Subject to KRS 386A.1-040(2), without limiting the terms that may be included in a\ngoverning instrument, the governing instrument may:\n(a) Provide the means by which beneficial ownership is determined and\nevidenced;\n(b) Limit a beneficial owner's right to transfer a beneficial interest;\n(c) Provide for one (1) or more series under Subchapter 4 of this chapter;\n(d) To the extent that voting rights are granted to the beneficial owners or trustees\nunder the governing instrument, include terms relating to:\n1. Notice of the date, time, place, or purpose of any meeting at which any\nmatter is to be voted on;\n2. Waiver of notice;\n3. Action by consent without a meeting;\n4. Establishment of record dates;\n5. Quorum requirements;\n6. Voting:\na. In person;\nb. By proxy;\nc. By any form of communication that creates a record, telephone, or\nvideo conference; or\nd. In any other manner; or\n7. Any other matter with respect to the exercise of the right to vote;\n(e) Provide for the creation of one (1) or more classes of trustees, beneficial\nowners, or beneficial interests having separate rights, powers, or duties;\n(f) Provide for any action to be taken without the vote or approval of any\nparticular trustee or beneficial owner, or classes of trustees, beneficial owners,\nor beneficial interests, including:\n1. Amendment of the governing instrument;\n2. Merger, conversion, or reorganization;\n3. Appointment of trustees;\n4. Sale, lease, exchange, transfer, pledge, or other disposition of all or any\npart of the property of the statutory trust or the property of any series\nthereof; and\n5. Dissolution of the statutory trust;\n(g) Provide for the creation of a statutory trust, including the creation of a\nstatutory trust to which all or any part of the property, liabilities, profits, or\nlosses of a statutory trust may be transferred or exchanged, and for the\nconversion of beneficial int erests in a statutory trust, or series thereof, into\nbeneficial interests in the new statutory trust or series thereof;\n(h) Provide for the appointment, election, or engagement of agents or independent\ncontractors of the statutory trust or delegates of the  trustees, or agents,\nofficers, employees, managers, committees, or other persons that may manage\nthe business and affairs of the statutory trust, designate their titles, and specify\ntheir rights, powers, and duties;\n(i) Provide rights to any person, including a person who is not a beneficial owner\nor not otherwise a party to the governing instrument, to the extent set forth\ntherein;\n(j) Subject to paragraph (k) of this subsection, specify the manner in which the\ngoverning instrument may be amended, includi ng, unless waived by all\npersons for whose benefit the condition or requirement was intended:\n1. A condition that a person that is not a party to the instrument must\napprove the amendment for it to be effective; and\n2. A requirement that the governing inst rument may be amended only as\nprovided in the governing instrument or as otherwise permitted by law;\n(k) Provide that a person may comply with paragraph (j) of this subsection by a\nrepresentative authorized by the person orally, in a record, or by conduct;\n(l) Provide that a person becomes a beneficial owner, acquires a beneficial\ninterest, and is bound by the governing instrument if the person complies with\nthe conditions for becoming a beneficial owner set forth in the governing\ninstrument;\n(m) Provide that the beneficial interest of any beneficial owner who fails to make\nany contribution that the beneficial owner is obligated to make or who\notherwise violates an obligation undertaken in the governing instrument shall\nbe subject to specified penalties for,  or specified consequences of, such\nfailure. Such penalty or consequence may take the form of reducing or\neliminating the defaulting beneficial owner's proportionate interest in the\nstatutory trust, subordinating the beneficial owner's interest to that of\nnondefaulting beneficial owners, a forced sale of that beneficial interest,\nforfeiture of his or her beneficial interest, the lending by other beneficial\nowners of the amount necessary to meet the defaulting beneficial owner's\ncommitment, a fixing of the v alue of his or her beneficial interest by appraisal\nor by formula and redemption or sale of the beneficial interest at such value,\nor other penalty or consequence;\n(n) Provide that the statutory trust or the trustees, acting for the statutory trust,\nhold b eneficial ownership of any income earned on securities held by the\nstatutory trust that are issued by any business entity formed, organized, or\nexisting under the laws of any jurisdiction;\n(o) Provide for the establishment of record dates;\n(p) Grant to, or withhold from, a trustee or beneficial owner, or class of trustees\nor beneficial owners, the right to vote, separately or with any or all other\ntrustees or beneficial owners, or class of trustees or beneficial owners, on any\nmatter;\n(q) Provide that neither the power to direct a trustee or other person nor the\nexercise of the power by any person, including a beneficial owner, causes the\nperson to be a trustee or imposes on the person duties, including fiduciary\nduties, or liabilities relating t o these duties, to a statutory trust or beneficial\nowner;\n(r) Provide that the statutory trust is to act as a beneficial owner associated with a\nseries thereof; or\n(s) Provide that each beneficial owner shall be the owner of an undivided\nbeneficial interes t in all property of the statutory trust in addition to or\nincluding an undivided beneficial interest in all property of or associated with\na series of the statutory trust with which the beneficial owner is associated.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=44373","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:17Z","sha256":"198d15d5c9f67141bba8204b21b9b7ca767215b1a827e8dc2d4c998c596fd445","source_id":"us-ky","stale":false,"prev":"us-ky/krs-386a.1-020","next":"us-ky/krs-386a.1-040"},"notice":"GroundRules: Original legal text. Not legal advice."}