Massachusetts Business Trust _MBT_ Law and Legal Definition
Massachusetts business trust_MBT_ is a trust originated to circumvent restrictions imposed upon corporate acquisition and development of real estate while achieving the limited liability aspect of a corporation. It is an unincorporated business organization created by a legal document, a declaration of trust, and used in place of a corporation or partnership for the transaction of various kinds of business with limited liability. The business trust was originated in Massachusetts in 1827. It is not necessarily one that is operated in the state of Massachusetts.
MBT give its trustees the legal title to the trust property to administer it for the advantage of its beneficiaries who hold equitable title to it. A written declaration of trust specifying the terms of the trust, its duration, the powers and duties of the trustees, and the interests of the beneficiaries is essential for the creation of a business trust. The beneficiaries receive certificates of beneficial interest as evidence of their interest in the trust, which is freely transferable. MBT provided the right to contract and to obtain legislatively constructed business organizations advantages without attaining permission to enter into a business activity. The property of a business trust is managed and controlled by trustees who have a fiduciary duty to the beneficiaries to act in their best interests. Profits and losses resulting from the use and investment of the trust property are shared proportionally by the beneficiaries according to their interests in the trusts.
