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JerrySJD
JerrySJD, Attorney
Category: Business Law
Satisfied Customers: 821
Experience:  Attorney for business formation, business sales, tax, partnerships, sole proprietors and buy/sell agreements.
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How does a Massachusetts Trust differ from a corporation. I

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How does a Massachusetts Trust differ from a corporation. I have certificates in a trust, but would like to know the value of those certificates, and whether or not they can be sold back to the trust.

JerrySJD :

A Massachusetts Business Trust has a different structure and management.


 

JerrySJD :

In a MBT, the Trustee runs the company and the beneficiaries share the profits. You usually can sell the certificates to third parties or back to the trust, unless specified otherwise in the trust deed. You need to see the trust deed itself to see if there are any restrictions. You can get a copy from the trustee, who is required to give it to you.


 

JerrySJD :

Value will depend on the transferability (see trust deed) and the value of the assets and business held by the trust. You can determine value by getting an appraisal There are a lot of companies that provide business appraisal services at prices ranging from 500 to 5,000 dollars.


 

JerrySJD :

It all depends on how complex the business is. If you have a far flung business enterprise, valuation is harder and more expensive. If the trust hold securities, it is vairly easy to value, by looking at the pro rata value of the assets. If there are 10 certificates and the stocks are worth 1 million, the certificate should be worth about 100k, for example.


 

JerrySJD :

In a corporation, the officers run the company and they are chosen by the board of directors. The board is elected by the shareholders. In a MBT, the trustee runs it. Usually there is a provision for trustee removal in the trust deed, so that is how you change managment. Trustees in an MBT have to give periodic accountings.


 

JerrySJD :

Does this make sense to you? Do you need more information?


 

JerrySJD :

Thank you for using JustAnswer. Please click "Accept". If you need more, just let me know


 

Customer:
JerrySJD and other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
If the trust was changed to a corporation, what should have happened to the "shares" held by those no longer working in the corporation? Shareholder letters have been sent out to those persons, but when they appeared at the annual meeting to ask for compensation for their shares, they were stone-walled by the trustees/officers. How do these shareholders get anything out of their shares, if they wish to sell back to the corporation?
You should have received shares in the new corp that you can sell back to the corp, or to third parties. You should send a certified letter demanding an accounting for your certificates. They cannot just disappear. You have a case and can win a settlement that could include punitive damages ("smart money"). The demand letter is the first step. So, you say you have the certificates, you are aware of the conversion and you expect shares of equal value and an accounting of how that value was determined.