Law Commons^™

The Business Trust As A Means Of Securing Limited Liability

Michigan Law Review

Small investors are unwilling to risk their entire personal fortunes in one business venture, and for this reason refuse to participate in an enterprise unless they are assured that they will be free from individual liability for the obligations of the business. Such freedom from liability may be obtained by incorporation. That is the method especially provided by law and the one which most businesses adopt, but it has its disadvantages. The organization of a corporation involves heavy expenses in the form of lawyers' fees, filing fees and organization taxes. Once formed the corporation is subject to many. special taxes, …