A Research On Business Trust

Business trust is straddling the line between law of trusts and law of business organization. Although business trust is derives from ordinary trust, there are a number of unique legal issues on business trust. Therefore, Not all rules in general trust law can apply to business trust. Business trust has unique rules. The rapid development of business trust requires proper regulation provided by business trust law. The Trust Act of China refers to the relative rules, which only apply to ordinary trust and charitable trust, in common law. There are so many loopholes in he Securities Investment Fund Act of China, the Regulation of Credit Asset Securitization, the Regulation of Financial Institutions'Asset Securitization and other individual acts and regulations that the acts and regulations mentioned above fail to tackle the special legal problems in business trust. This Article analyzes the unique legal issues on business trust and unique rules of business trust law through historical, comparative, law and economics, doctrinal, and positive approach.Apart from introduction and conclusion, this Article consists of five parts.Part I, Introduction to Business Trust. Part I aims to disclose the rational and justified foundation of the rules of trust law through analyzing the definition, uniques and unique classification of business trust. Business trust is an unincorporated entity created under statutes that files a certificate of trust and is governed by a trust instrument under which property is or will be held by a trustee for the benefit of one or more beneficial owners.Part II, Business Trust as a Legal Entity. Acknowledgement of business trust as a legal entity has practical significance and theoretical evidence.Part III, The Formation, Existence, Modification and Termination of Business Trust. Related unique legal issues include: business trust is created by contract and shall file a certificate of trust. Business trust has perpetual existence. Rule Against Perpetuities and Rule Against Accumulations are not applicable to business trust. The modification and termination of business trust are decided by the beneficiaries rather than the court. The trustees shall wind up the affairs of business trust before the termination of business trust.Part IV, The External Relationship of Business Trust. The beneficiary of business trust is personally liable to the creditors of business trust under specific circumstances. Beneficial interest in the business trust is freely transferable and shall not be restricted by trust instruments. Part V, The Internal Relationship of Business Trust. The settlor of business trust has no right in business trust. The trusteeship of business trust is regulated specially. Public business trust shall be managed by cotrustee. The trustee's duty of loyalty in business trust is distinct from in ordinary trust. The beneficiaries of business trust exercise beneficial right collectively.