Which statement best describes a Business trust / common law trust / Massachusetts Trust?

• A. A standard real estate brokerage corporation
• B. A trust whose units are sold to the public as securities
• C. A sole proprietorship
• D. A non-profit charity

Answer: (B)

A business trust (also called a Massachusetts trust or common-law trust) is an investment vehicle where investors own units in a trust that is managed by trustees. The defining feature is that these units are sold to the public as securities, making the arrangement a pooled investment rather than a traditional business structured as a corporation, sole proprietorship, or nonprofit. This setup distinguishes it from a standard real estate brokerage corporation, a sole proprietorship (which has a single owner and no separate trust structure), or a nonprofit charity (which operates for a charitable purpose rather than as an investment vehicle).