British Virgin Islands company law
British Virgin Islands company law is codified in the BVI Business Companies Act, 2004, to a lesser extent by the Insolvency Act, 2003 and the Securities and Investment Business Act, 2010. The British Virgin Islands has 30 registered companies per head of population, the highest ratio of any country in the world. Annual company registration fees provide a significant part of Government revenue in the British Virgin Islands, which accounts for the comparative lack of other taxation. Accordingly, company law forms a much more prominent part of the law of the British Virgin Islands than might otherwise be expected; the first companies legislation in the British Virgin Islands was the Companies Act, 1884. However the great leap forward for company law in the jurisdiction occurred in 1984 with the passing of the International Business Companies Act, 1984; that legislation was passed to try and promote the incorporation of offshore companies as a method of economic development in the wake of the cancellation by the U.
S. A. of the double taxation treaty which had existed between the two countries prior to that time. The International Business Companies Act was enormously successful, resulted in the registration of a large number of companies. However, in the early 2000s the British Virgin Islands came under external pressure to repeal statutes such as the International Business Companies Act which provided for "ring-fenced" taxation; this led to the repeal of both the Companies Act and the International Business Companies Act and their replacement with the BVI Business Companies Act, which provided for equal tax treatment of all companies. The change had little impact on incorporation rates as the British Virgin Islands imposes no form of direct taxation. In the British Virgin Islands, only a licensed registered agent can form a company, it is not possible for a member of the public to do so. The principal reason for this is to reinforce anti-money laundering obligations under the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008.
Any person who wishes to form a registered company must do so through a licensed agent, the agent is required to obtain client due diligence to comply with the regulations. All companies formed in the British Virgin Islands are now registered under the BVI Business Companies Act. In addition there are a small number of statutory corporations, most of which serve some kind of public function. Under the BVI Business Companies Act it is possible to register five broad types of company: Company limited by shares Company limited by guarantee and not authorised to issue shares Company limited by guarantee and authorised to issue shares Unlimited company authorised to issue shares Unlimited company not authorised to issue sharesIn practice the vast majority of companies are registered as companies limited by shares. Furthermore, when registering a company, the company may further be registered as: Segregated portfolio company Restricted purpose companyA segregated portfolio company is a company which segregates the assets and liabilities of different classes of shares from each other and from the general assets of the company.
All segregated portfolio companies are required to include the designation "" within their name, must comply with the Segregated Portfolio Company Regulations, 2005. A restricted purpose company is a special type of company intended for use in bankruptcy remote bond issues, which only has limited corporate capacity to undertake certain specific purposes. Unusually, in the British Virgin Islands the formation of a company does not involve the issuing of subscriber shares. Accordingly, when a company is incorporated it has no members; the registered agent has a statutory power to appoint the first directors of the company, the first directors can receive subscriptions and issue shares. However, until the first shares are issued the directors are liable for anything which they do in the name of the company. In the British Virgin Islands a company has separate legal personality from its members; the liability of the members of a company is limited to their shares or the amount of their guarantee.
Directors or officers of a company are not liable for the company's debts except insofar as they may otherwise be liable for their own conduct or actions. The primary circumstances where liability may be imposed upon directors in relation to their acts as directors are where the company has no members, where a person acts as a director despite being disqualified, where the director authorises payment of an unlawful distribution which cannot be recovered, where the director is guilty of trading whilst insolvent, misfeasance or fraudulent trading, or where the director undertakes personal responsibility or liability for certain actions. Conversely, the assets of a company are regarded as belonging to the company and not the company's members. In exception circumstances the courts are prepared to "pierce the corporate veil" and treat the assets of the company as belonging to the members, but the circumstances in which this will be done are rare and exceptional; the corporate constitution of a private company regis
A corporation is an organization a group of people or a company, authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations come in many different types but are divided by the law of the jurisdiction where they are chartered into two kinds: by whether they can issue stock or not, or by whether they are formed to make a profit or not. Corporations can be divided by the number of owners: corporation corporation sole; the subject of this article is a corporation aggregate. A corporation sole is a legal entity consisting of a single incorporated office, occupied by a single natural person. Where local law distinguishes corporations by the ability to issue stock, corporations allowed to do so are referred to as "stock corporations", ownership of the corporation is through stock, owners of stock are referred to as "stockholders" or "shareholders".
Corporations not allowed to issue stock are referred to as "non-stock" corporations. Corporations chartered in regions where they are distinguished by whether they are allowed to be for profit or not are referred to as "for profit" and "not-for-profit" corporations, respectively. There is some overlap between stock/non-stock and for-profit/not-for-profit in that not-for-profit corporations are always non-stock as well. A for-profit corporation is always a stock corporation, but some for-profit corporations may choose to be non-stock. To simplify the explanation, whenever "Stockholder" or "shareholder" is used in the rest of this article to refer to a stock corporation, it is presumed to mean the same as "member" for a non-profit corporation or for a profit, non-stock corporation. Registered corporations have legal personality and their shares are owned by shareholders whose liability is limited to their investment. Shareholders do not actively manage a corporation. In most circumstances, a shareholder may serve as a director or officer of a corporation.
In American English, the word corporation is most used to describe large business corporations. In British English and in the Commonwealth countries, the term company is more used to describe the same sort of entity while the word corporation encompasses all incorporated entities. In American English, the word company can include entities such as partnerships that would not be referred to as companies in British English as they are not a separate legal entity. Late in the 19th century, a new form of company having the limited liability protections of a corporation, the more favorable tax treatment of either a sole proprietorship or partnership was developed. While not a corporation, this new type of entity became attractive as an alternative for corporations not needing to issue stock. In Germany, the organization was referred to as Gesellschaft mit beschränkter Haftung or GmbH. In the last quarter of the 20th Century this new form of non-corporate organization became available in the United States and other countries, was known as the limited liability company or LLC.
Since the GmbH and LLC forms of organization are technically not corporations, they will not be discussed in this article. The word "corporation" derives from corpus, the Latin word for body, or a "body of people". By the time of Justinian, Roman law recognized a range of corporate entities under the names universitas, corpus or collegium; these included the state itself and such private associations as sponsors of a religious cult, burial clubs, political groups, guilds of craftsmen or traders. Such bodies had the right to own property and make contracts, to receive gifts and legacies, to sue and be sued, and, in general, to perform legal acts through representatives. Private associations were granted designated liberties by the emperor. Entities which carried on business and were the subjects of legal rights were found in ancient Rome, the Maurya Empire in ancient India. In medieval Europe, churches became incorporated, as did local governments, such as the Pope and the City of London Corporation.
The point was that the incorporation would survive longer than the lives of any particular member, existing in perpetuity. The alleged oldest commercial corporation in the world, the Stora Kopparberg mining community in Falun, obtained a charter from King Magnus Eriksson in 1347. In medieval times, traders would do business through common law constructs, such as partnerships. Whenever people acted together with a view to profit, the law deemed. Early guilds and livery companies were often involved in the regulation of competition between traders. Dutch and English chartered companies, such as the Dutch East India Company and the Hudson's Bay Company, were created to lead the colonial ventures of European nations in the 17th century. Acting under a charter sanctioned by the Dutch government, the Dutch East India Company defeated Portuguese forces and established itself in the Moluccan Islands in order to profit from the European demand for spices. Investors in the VOC were issued paper certificates as proof of share ownership, were able to trade their shares on the original Amsterdam
S. A. or Société anonyme designates a type of corporation in countries that employ civil law. Depending on language, it means anonymous company, anonymous partnership, share company, or joint-stock company equivalent to public limited company in common law jurisdictions, it is different from private limited companies. Shareholders could be anonymous and collect dividends by surrendering coupons attached to their share certificates. Dividends were therefore paid to. Share certificates could be transferred and therefore the management of the company would not know who owned its shares. Like bearer bonds, illegal unregistered share ownership and dividend collection enabled money laundering, tax evasion, concealed business transactions in general, so governments passed laws to audit the practice. Nowadays, shareholders of S. A.s are not anonymous, though shares can still be held by holding companies in order to obscure the beneficiary. S. A. can be an abbreviation of: Sociedade Anónima in Galician and European Portuguese Sociedá Anónima in Asturian and Leonese Sociedade Anônima in Brazilian Portuguese Societat Anònima in Catalan Société anonyme in French Società Anonima in Italian Sociedad Anónima or Sociedad por Acciones in Spanish Mexican law takes into account the variability of the corporate stock, resulting in most S.
A. turning into Sociedad Anónima de Capital Variable, or Sociedad Anónima Bursátil de Capital Variable for publicly traded companies. Mexico has Sociedad de Responsabilidad Limitada de Capital Variable, analogous to the limited liability company. Spółka Akcyjna in Polish Societate pe Acțiuni in RomanianIt is equivalent in literal meaning and function to: Naamloze vennootschap in Dutch Ανώνυμη Εταιρεία, Anonymi Etaireia in Greek Perseroan Terbatas Terbuka in Indonesia Berhad in Malaysia Anonim Şirket in Turkish Corporación anónima in VenezuelaIt is equivalent in function to: Shoqëri Aksionare in Albanian شركة مساهة عامة ذات مسؤولية محدودة ش.ذ.م.م, Sharikah musāhamah ʿāmmah dhāt mas'ūliyyah maḥdūdah in Arabic Dioničko društvo in Croatian and Bosnian Акционерно дружество, Aktsionerno druzhestvo in Bulgarian Акционерско друштво, Aktsionersko drushtvo in Macedonian Akciová společnost in Czech Aktieselskab in Danish Société anonyme égyptienne or (شركة مساهمة مصرية (ش.م.م in Egypt Osakeyhtiö in Finnish Aktsiaselts in Estonian Aktiengesellschaft in German Részvénytársaság in Hungarian Hlutafélag in Icelandic Public Limited in India Public limited company in the United Kingdom and several Commonwealth countries Kabushiki Gaisha or 株式会社 in Japan Jusighoesa or 주식회사 in Korea Société anonyme laotienne in Laos Akcinė bendrovė in Lithuanian Akciju Sabiedrība in Latvian Aksjeselskap in Norwegian Акционерное общество, Aktsionernoye obshchestvo in Russian Деоничарско друштво, Deoničarsko društvo, or Акционарско друштво, Akcionarsko društvo in Serbian Akciová spoločnosť in Slovak Delniška družba in Slovene Aktiebolag in Swedish Акціонерне товариство, Aktsionerne tovarystvo in Ukrainian Publicly traded company or Incorporated in the United States, though the former term does not appear in the names of business entities Compañía Anónima in Andorra ក.អ or Société anonyme cambodgienne in Cambodia Président-directeur général Global Witness on Anonymous Companies
Limited liability partnership
A limited liability partnership is a partnership in which some or all partners have limited liabilities. It therefore can exhibit elements of corporations. In a LLP, each partner is not liable for another partner's misconduct or negligence; this is an important difference from the traditional partnership under the UK Partnership Act 1890, in which each partner has joint and several liability. In a LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders must elect a board of directors under the laws of various state charters; the board organizes itself and hires corporate officers who have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. A LLP contains a different level of tax liability from that of a corporation. Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor.
As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management. In some countries, an LLP must have at least one person known as a "general partner", who has unlimited liability for the company. There is considerable difference between LLPs as constituted in the U. S. and those introduced in the UK under the Limited Liability Partnerships Act 2000 and adopted elsewhere. The UK LLP is, despite its name legislated as a corporate body rather than as a partnership. For a fuller country-by-country listing of types of partnerships and companies, see List of business entities. Partnerships are governed on a state-by-state basis in Australia. In Queensland, a limited liability partnership is composed of at least one general partner and one limited partner, it is thus similar to. All provinces—except Yukon, Prince Edward Island, Nunavut—permit LLPs for lawyers and accountants. In British Columbia, the Partnership Amendment Act, 2004 permits LLPs for lawyers and other professionals, as well as businesses.
In China, the LLP is known as a Special general partnership. The organizational form is restricted to knowledge-based professions and technical service industries; the structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. There is no exact equivalent of a Limited Liability Partnership in France. A limited partnership is equivalent to the French law vehicle known as a fr:Société en Commandite. A partnership company can be an equity partnership, known as a fr:Société en Participation, of a general partnership known as a fr:Société en Nom Collectif; the German Partnerschaftsgesellschaft or PartG is an association of non-commercial professionals, working together. Though not a corporate entity, it can sue and be sued, own property and act under the partnership's name; the partners, are jointly and severally liable for all the partnership's debts, except when only some partners' misconduct caused damages to another party — and only if professional liability insurance is mandatory.
Another exception, possible since 2012, is a Partnerschaftsgesellschaft mbB where all liabilities from professional misconduct are limited by the partnership's capital. The Partnerschaftsgesellschaft is not subject to corporate or business tax, only its partners' respective income is taxed. An LLP is an approximate equivalent to the Greek ΕΠΕ meaning Company of Limited Liability. In an ΕΠΕ the partners own personal shares that can be sold by a partner only when all other partners agree; the business management can be exercised either directly by the board of partners or by a General Manager. In the aspect of liability, an ΕΠΕ is identical to an LLP. In Hungary, LLP is equivalent to the Hungarian "Betéti Társaság" which must have at least two members: at least one must have unlimited liability and at least one must have limited liability. BTs have legal personhood under Hungarian law; the Limited Liability Partnership Act 2008 was published in the official Gazette of India on 9 January 2009 and has been in effect since 31 March 2009.
However, only limited sections of the Act have been ratified. Rules of the Act were published in the official Gazette on 1 April 2009 and amended in 2017; the first LLP was incorporated on 2 April 2009. In India as in many other jurisdictions, an LLP is different from a Limited Partnership. An LLP operates like a limited partnership, but in an LLP, each member is protected from personal liability, except to the extent of their capital contribution in the LLP. In India, for all purposes of taxation, an LLP is treated like any other Partnership firm. Liability is limited to each partners agreed upon contribution to the LLP. No partner is liable on account of the independent or unauthorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner's wrongful business decisions or misconduct. An LLP shall be a body a legal entity separate from its partners, it will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there
Corporate law is the body of law governing the rights and conduct of persons, companies and businesses. It refers to the theory of corporations. Corporate law describes the law relating to matters which derive directly from the life-cycle of a corporation, it thus encompasses the formation, funding and death of a corporation. While the minute nature of corporate governance as personified by share ownership, capital market, business culture rules differ, similar legal characteristics - and legal problems - exist across many jurisdictions. Corporate law regulates how corporations, shareholders, employees and other stakeholders such as consumers, the community, the environment interact with one another. Whilst the term company or business law is colloquially used interchangeably with corporate law, business law refers to wider concepts of commercial law, that is, the law relating to commercial or business related activities. In some cases, this may include matters relating to financial law; when used as a substitute for corporate law, business law means the law relating to the business corporation, i.e. capital raising, company formation, etc.
Academics identify four legal characteristics universal to business enterprises. These are: Separate legal personality of the corporation Limited liability of the shareholders Transferable shares Delegated management under a board structure. Available and user-friendly corporate law enables business participants to possess these four legal characteristics and thus transact as businesses. Thus, corporate law is a response to three endemic opportunism: conflicts between managers and shareholders, between controlling and non-controlling shareholders. A corporation may be called a company. In the United States, a company may or may not be a separate legal entity, is used synonymous with "firm" or "business." According to Black's Law Dictionary, in America a company means "a corporation — or, less an association, partnership or union — that carries on industrial enterprise." Other types of business associations can include partnerships, or trusts, or companies limited by guarantee. Corporate law deals with companies that are incorporated or registered under the corporate or company law of a sovereign state or their sub-national states.
The defining feature of a corporation is its legal independence from the shareholders. Under corporate law, corporations of all sizes have separate legal personality, with limited or unlimited liability for its shareholders. Shareholders control the company through a board of directors which, in turn delegates control of the corporation's day-to-day operations to a full-time executive. Shareholders' losses, in the event of liquidation, are limited to their stake in the corporation, they are not liable for any remaining debts owed to the corporation's creditors; this rule is called limited liability, it is why the names of corporations end with "Ltd.". or some variant such as "Inc." or "plc"). Under all legal systems corporations have much the same legal rights and obligations as individuals. In some jurisdictions, this extends to allow corporations to exercise human rights against real individuals and the state, they may be responsible for human rights violations. Just as they are "born" into existence through its members obtaining a certificate of incorporation, they can "die" when they lose money into insolvency.
Corporations can be convicted of criminal offences, such as corporate fraud and corporate manslaughter. In order to understand the role corporate law plays within commercial law, it is useful to understand the historical development of the corporation, the development of modern company law. Although some forms of companies are thought to have existed during Ancient Rome and Ancient Greece, the closest recognizable ancestors of the modern company did not appear until the 16th century. With increasing international trade, Royal charters were granted in Europe to merchant adventurers; the Royal charters conferred special privileges on the trading company. Traders in these entities traded stock on their own account, but the members came to operate on joint account and with joint stock, the new Joint stock company was born. Early companies were purely economic ventures; the development of company law in Europe was hampered by two notorious "bubbles" in the 17th century, which set the development of companies in the two leading jurisdictions back by over a century in popular estimation.
Companies inevitably, returned to the forefront of commerce, although in
United States corporate law
United States corporate law regulates the governance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governance rights, found in the Securities Act of 1933 and the Securities and Exchange Act of 1934, as amended by laws like the Sarbanes–Oxley Act of 2002 and the Dodd–Frank Act of 2010; the US Constitution was interpreted by the US Supreme Court to allow corporations to incorporate in the state of their choice, regardless of where their headquarters are. Over the 20th century, most major corporations incorporated under the Delaware General Corporation Law, which offered lower corporate taxes, fewer shareholder rights against directors, developed a specialized court and legal profession. Nevada has done the same. Twenty-four states follow the Model Business Corporation Act, while New York and California are important due to their size. At the Declaration of Independence, corporations had been unlawful without explicit authorization in a Royal Charter or an Act of Parliament of the United Kingdom.
Since the world's first stock market crash corporations were perceived as dangerous. This was because, as the economist Adam Smith wrote in The Wealth of Nations, directors managed "other people's money" and this conflict of interest meant directors were prone to "negligence and profusion". Corporations were only thought to be legitimate in specific industries that could not be managed efficiently through partnerships. After the US Constitution was ratified in 1788, corporations were still distrusted, were tied into debate about interstate exercise of sovereign power; the First Bank of the United States was chartered in 1791 by the US Congress to raise money for the government and create a common currency. It had private investors, but faced opposition from southern politicians who feared federal power overtaking state power. So, the First Bank's charter was written to expire in 20 years. State governments could and did incorporate corporations through special legislation. In 1811, New York became the first state to have a simple public registration procedure to start corporations for manufacturing business.
It allowed investors to have limited liability, so that if the enterprise went bankrupt investors would lose their investment, but not any extra debts, run up to creditors. An early US Supreme Court case, Trustees of Dartmouth College v Woodward, went so far as to say that once a corporation was established a state legislature could not amend it. States reacted by reserving the right to regulate future dealings by corporations. Speaking, corporations were treated as "legal persons" with separate legal personality from its shareholders, directors or employees. Corporations were the subject of legal rights and duties: they could make contracts, hold property or commission torts, but there was no necessary requirement to treat a corporation as favorably as a real person. Over the late 19th century and more states allowed free incorporation of businesses with a simple registration procedure. Many corporations would be small and democratically organized, with one-person, one-vote, no matter what amount the investor had, directors would be up for election.
However, the dominant trend led towards immense corporate groups where the standard rule was one-share, one-vote. At the end of the 19th century, "trust" systems were used to concentrate control into the hands of a few people, or a single person. In response, the Sherman Antitrust Act of 1890 was created to break up big business conglomerates, the Clayton Act of 1914 gave the government power to halt mergers and acquisitions that could damage the public interest. By the end of the First World War, it was perceived that ordinary people had little voice compared to the "financial oligarchy" of bankers and industrial magnates. In particular, employees lacked voice compared to shareholders, but plans for a post-war "industrial democracy" did not become widespread. Through the 1920s, power concentrated in fewer hands as corporations issued shares with multiple voting rights, while other shares were sold with no votes at all; this practice was halted in 1926 by public pressure and the New York Stock Exchange refusing to list non-voting shares.
It was possible to sell voteless shares in the economic boom of the 1920s, because more and more ordinary people were looking to the stock market to save the new money they were earning, but the law did not guarantee good information or fair terms. New shareholders had no power to bargain against large corporate issuers, but still needed a place to save. Before the Wall Street Crash of 1929, people were being sold shares in corporations with fake businesses, as accounts and business reports were not made available to the investing public; the Wall Street Crash saw the total collapse of stock market values, as shareholders realized that corporations had become overpriced. They sold shares en masse, meaning meant; the result was that thousands of businesses were forced to close, they laid off workers. Because workers had less money to spend, businesses received less income, leading to more closures and lay-offs; this downward spiral began the Great Depression. Berle and Means argued that under-regulation was the primary cause in their foundational book in 1932, The Modern Corporation and Private Property.
They said di
Delaware statutory trust
A Delaware statutory trust is a recognized trust, set up for the purpose of business, but not in the U. S. state of Delaware. It may be referred to as an Unincorporated Business Trust or UBO. Delaware statutory trusts are formed as private governing agreements under which either property is held, administered, invested and/or operated. DST Investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings; the DST property ownership structure allows the smaller investor to own a fractional interest in large, institutional quality and professionally managed commercial property along with other investors, not as limited partners, but as individual owners within a Trust. Each owner receives their percentage share of the cash flow income, tax benefits, appreciation, if any, of the entire property. DSTs provide the investor the potential for annual appreciation and depreciation, most have minimum investments as low as $100,000, allowing some investors the benefit of diversification into several properties.
The DST ownership option offers the same benefits and risks that an investor would receive as a single large-scale investment property owner, but without the management responsibility. Each DST property asset is managed by professional investment real estate asset managers and property managers, it used to be that only large institutional investors such as life insurance companies, pension funds, real estate investment trusts, college endowments and foundations were able to invest in these properties. Now as a viable 1031 exchange replacement property option through a DST, individual investors have the ability to invest in a diversified selection of institutional quality, investment property types that they otherwise could not purchase individually. DST Investments are located throughout the United States. Property types may include multifamily apartment communities, office buildings, industrial properties, multi-tenant retail, student housing, assisted living, self-storage facilities, medical office, single tenant retail properties and others.
The concept for business trusts those that involve the holding of property, dates back to 16th century English Common Law. In Delaware, it was not until 1947. No legal recognition of statutory trusts existed until the passage of the Delaware Statutory Trust Act, 12 Del. C. 3801 et. Seq. in 1988. Under The Act, developed on the premise of trust law, statutory trusts were now recognized as their own legal entity, separate from their trustee, offering freedom from the corporate law template. Within the tradition of trust law, freedom of contract allows the trustee to structure their entity in a way, most beneficial to the relationship of all parties and their expertise, while offering liability protection similar to that of a Limited liability company or Partnership. Since the year 2000, Delaware statutory trusts have been used as a form of tax deferral, asset protection, balance sheet advantages in real estate, mezzanine financing, real estate investment trusts, mutual funds. Massachusetts, another state that has trust law, refers to its legal entity as a Massachusetts business trust.
Most states, still rely on Common Law to oversee the trusts within their jurisdiction. The formation of a Delaware statutory trust is simple and inexpensive, when compared to that of the more complex filings of other entity types. To form a statutory trust, a private trust agreement must be developed by all involved parties to ensure that individual interests are protected; the private trust agreement need not be shown to any official of the State. Once the agreement is completed, a Certificate of Trust can be obtained from the Delaware Division of Corporations and completed; the signatures of the trustee involved are required, followed by submission of the forms to the Division of Corporations, along with a one-time $200 processing fee. If the statutory trust is, or will become, a registered investment company, it must maintain a registered agent and a registered office within the State of Delaware. If no desire for the statutory trust to be an investment company exists, the only remaining requirement is that it must have at least one trustee who resides in, or has a principal place of business within the State of Delaware.
On August 16, 2004, Internal Revenue Bulletin 2004-33 was published in reference to Rev. Rul. 2004-86. This involved a Delaware Statutory Trust that came before the Internal Revenue Service and Treasury Department, who offered a ruling on the following two issues: "ow is a Delaware statutory trust, described in Del. Code Ann. Title 12, §§ 3801 - 3824, classified for federal tax purposes?""The Delaware statutory trust described above is an investment trust, under § 301.7701-4, that will be classified as a trust for federal tax purposes." "ay a taxpayer exchange real property for an interest in a Delaware statutory trust without recognition of gain or loss under § 1031 of the Internal Revenue Code?""A taxpayer may exchange real property for an interest in the Delaware statutory trust described above without recognition of gain or loss under § 1031, if the other requirements of § 1031 are satisfied."These holdings of the federal government offered a clearer notion that Delaware statutory trusts are