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Commercial Trusts as Business Organizations: Unraveling the Mystery

28 Pages Posted: 2 Jan 2003  

Steven L. Schwarcz

Duke University School of Law


Notwithstanding their origins in gratuitous transfers, trusts are increasingly being used for securitizations and other distinctly non-gratuitous commercial or financial transactions. Few, however, have considered whether existing trust law is adequate to govern these "commercial" trusts, or whether commercial trusts are a better form of business organization than traditional alternatives, such as corporations. My article builds an analytical framework to examine these issues, concluding that commercial trusts and corporations can be viewed as mirror-image entities that respond to different investor needs.

Although its focus is on trust law in the United States, the article also attempts to inform scholars in civil law countries, where trusts are only now beginning to be recognized, why trusts have become important forms of business organization.

Notes: This is an updated abstract and paper.

Suggested Citation

Schwarcz, Steven L., Commercial Trusts as Business Organizations: Unraveling the Mystery. Duke Law School, Public Law Research Paper No. 32. Available at SSRN: or

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

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