Definition of Massachusetts business trust
Further reading
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. They may also be referred to as an unincorporated business organization or UBO. Business trusts may be established under the laws of other U.S. states.
Many businesses are formed as MBTs to mitigate taxation; mutual funds in the U.S. are often structured as MBTs, though sometimes they are organized as Maryland corporations (or other states such as Minnesota). More recently, a Delaware statutory trust or DST has become a popular form of organization, and many new funds have been organizing as DSTs and exiting funds converting to DSTs. Since mutual funds are investment companies and not operating companies, many traditional corporation rules and requirements don't fit them well.
During the last century and through the mid years of this century the tax laws and State regulations strongly favored corporate structures, tightening of these laws in the past 10-15 years have resulted in the resurgence of the use of the UBO. For example, in 1985 the Scudder Capital Growth Fund, Inc. and Kemper Money Market Fund, Inc. changed their forms of organization from a corporation to a business trust.
References:
- Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.
|
