How Formed? Not often utilized in California.   Massachusetts, Delaware, Illinois, and Utah are among the states in which this form of doing business is popular. Business trusts retain the trust's flexibility of management and of distribution. Delaware's new business trust law is particularly interesting because of Delaware's traditional support for business formation, it's new asset protection laws, and its repeal of the "rule against perpetuities" for most purposes. Furthermore, there is no Delaware income tax imposed on trust beneficiaries not resident in Delaware.

Taxation: Business trusts are not "trusts" for tax purposes, because they carry on a business for profit and they have "associates"; they are not simply arrangements to protect or conserve trust property for the beneficiaries. Accordingly, they are classified as either partnerships or corporations ("associations" which are taxable as corporations) for tax purposes. Under the "check the box" regulations, the "default" treatment for a business trust is as a partnership if there is more than one beneficiary, or the business trust is disregarded as an entity if it has only one beneficiary. The business trust may elect to be treated as a corporation.