A business trust, historically called a corporate trust, is a large grouping of business interests with significant market power, formed as a single corporation or as a group of corporations that cooperate through a trade association, shared ownership interests, or a corporate group structure. The term is most closely associated with the near-monopolies that emerged in the United States during the Second Industrial Revolution of the 19th and early 20th centuries, when rival firms in an industry combined their operations under one controlling trust. That era of consolidation is the historical reason the resulting body of law is called antitrust law.
Facts
Core MechanismA Massachusetts business trust places business assets and operations into a trust structure rather than a corporation, with trustees managing the trust's property and business for the benefit of holders of transferable trust certificates who function much like shareholders. The form takes its name from the first such trusts being recognized in Massachusetts, though it can be established under the law of other states, and is used today mainly to structure mutual funds and to reduce taxation compared with a conventional corporate structure. 1 Partially Attested
Origin Year1827 dates the Massachusetts business trust form, which the entity's core-mechanism describes. The entity-description also covers the antitrust-era corporate trusts of the late 19th century, which this source does not date. Connections
Associated With
The business trust structure survives today mainly in real estate, where real estate investment trusts are organized as trusts holding income-producing property on behalf of their beneficiaries.
Vornado Realty Trust is a real estate investment trust formed in Maryland and organized as a trust rather than a corporation, an example of the business trust legal form applied to property holding.
Sources
1. Wikipedia, Massachusetts Business Trust
WikipediaWikipedia: Massachusetts business trust, lead paragraph
A Massachusetts Business Trust (MBT) is a legal trust set up for the purposes of business, but not necessarily one that is operated in the Commonwealth of Massachusetts.
History
The business trust made its debut in Massachusetts in 1827.
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