business trust

Definition

A legal organization established through a trust in which the trustees manage and control assets for the benefit of the trust's beneficiaries. Used primarily to transact securities or real estate where the income, profits and losses are shared proportionately among beneficiaries and the assets are protected from creditors and litigation. In some states, a business trust is subject to the laws of trusts, while in others it is subject to the general laws of incorporation or partnership formation.

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