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MASSACHUSETTS BUSINESS TRUSTS

Please note that the following should not be construed as legal advice. You should consult an experienced
Massachusetts business attorney if you have a specific legal matter that needs to be addressed. Contact us today at
(800) 719-4889 if you need help with your Massachusetts business matter (you can read about our lawyers and
professionals here). Please review our main business law page if you have additional questions about the process of forming
a business entity in Massachusetts.

Massachusetts Business Trust

A Massachusetts business trust is an unincorporated business association created by a trust instrument in which property is
held and managed by a trustee or trustees for the benefit of the holders ("shareholders") of transferable shares that
represent the shareholders' beneficial ownership in the trust estate. A Massachusetts business trust is a hybrid, sharing
some of the characteristics of a corporation, a limited partnership and a trust. The shareholders of a Massachusetts business
trust, like the limited partners of a limited partnership, enjoy limited liability only so long as they do not participate in the
management of the business. Finally, the instrument creating the Massachusetts business trust should generally be
executed to conform to the law of trusts.

Statutory Requirements for Formation

A Massachusetts business trust is organized by the filing of a written instrument or declaration of trust with the secretary of
state and the clerk of every city or town where the trust has a usual place of business.

Control and Management

Under most trust instruments the trustees are responsible for the control and management of the trust. The extent to which
the trustees may act solely or only jointly should be set forth in the trust instrument, as well as the extent to which control
or management duties may be delegated to employees or third parties. Holders of beneficial shares of the trust, like limited
partners in a partnership, may not participate in the control or management of the business without risking loss of the
limitations on liability that the business trust form affords.

Liability

Assuming that they do not participate in the management of the trust's business, shareholders are not personally liable for
the debts and obligations of a business trust. The trust as a separate entity may be sued for debts or other obligations of
the trustees or their agents in the performance of duties under the declaration of trust and for damages resulting from the
negligence of such trustees or agents acting in the performance of their duties. Unless contracts with the trustees expressly
absolve the trustees from liability, the trustees may be liable personally for obligations of a business trust.

Continuity of Existence

A business trust remains in effect until terminated in accordance with the declaration of trust establishing it. The death or
withdrawal of a shareholder does not cause the termination or dissolution of a business trust.

Transferability of Interests

Shares of beneficial interest in a business trust are substantially the same as shares of stock in a corporation. Subject to any
restrictions on transfer contained in the declaration of trust, the shares are freely transferable — provided that there has
been compliance with federal and state securities laws.

Federal and State Taxation

For federal purposes, a Massachusetts business trust is generally treated as if it were a corporation and, consequently, is
taxed as a C corporation unless it elects S corporation status. For Massachusetts state tax purposes, a business trust is a
hybrid: the trust is treated for income tax purposes as though it were an individual but is treated as a C corporation with
respect to its formation and certain "corporate" reorganizations.