What is the primary purpose for creating business trusts?

The primary purpose of creating business trusts is to hold or protect property for beneficiaries. Business trusts are legal entities that allow an individual or group of individuals (trustees) to manage and control property or assets on behalf of the beneficiaries. The structure is specifically designed to provide a safeguard for the property, ensuring that it is managed according to the terms set forth in the trust agreement and for the benefit of the designated beneficiaries. This can include real estate, securities, and other forms of investments.

While managing financial investments, facilitating loans and insurance, or generating profit for shareholders may be functions or secondary effects of a business trust, the foundational and most significant purpose remains the protection and management of assets for those who are not in direct control of them. In other words, business trusts exist primarily to ensure that the interests of beneficiaries are upheld and that their assets are preserved and managed responsibly.