Business Trust

There are variations on the foregoing themes of alternative business entities, created in most instances by contract rather than statute. The so-called 'Massachusetts Business Trust", for example, is an entity organized under the principles of the law of trusts but designed to look, in most important respects, like a corporation, including (principally) "transferable shares." The "business trust" form of organization was devised in response to perceived, and now extinct, advantages under tax laws of certain states; the genre is still popular among organizers of certain types of public companies, real estate investment trusts ("REIT"s), and investment companies, for example, because the organic document governing a business trust, a creature of the draftsman's imagination and not generally subject to the rigidities of a general corporation law, does not require formalities such as annual meetings of shareholders. A non public business trust is subject to the "check the box" rules. For public vehicles, special "pass-through" tax treatment is provided by the Code for qualifying REITS and investment companies, but that treatment is available whether they are organized as trusts or corporations.