Massachusetts Trust Legal Meaning and Definition

Here is a simplified definition of the legal term Massachusetts Trust.

Massachusetts Trust (noun): A type of trust in which the shareholders of a business entity transfer their rights in the business to the trust, and in return, receive certificates from the trust. This trust now has the authority to manage the business on behalf of the certificate holders. Similar to a limited partnership, the certificate holders' maximum liability is limited to the value of the shares they have transferred to the trust. This form of trust is named after the U.S. state where it first emerged, Massachusetts.