Small Business Reading Room


Thursday, June 17, 2004

New DE Legislation Regarding Statutory Trusts (Business Trusts)

AN ACT TO AMEND CHAPTER 38, TITLE 12 OF THE DELAWARE CODE RELATING TO STATUTORY TRUSTS.

House Bill 463:

Chapter 38 of Title 12 of the Delaware Code provides for creation and treatment of statutory trusts (formerly known as “business trusts”). A statutory trust is a separate legal entity which can hold and manage property, such as a real estate investment trust, and carry on other business activities. The Code also regulates the registration of business trusts from other jurisdictions to do business in Delaware.The Chapter has been amended periodically to keep it current and to maintain Delaware’s national preeminence. This bill continues that practice by making a number of amendments, as follows:

Section 1. This Amendment confirms the manner in which assets may be held and accounted for.

Sections 2 through 4. These Amendments deal with the contents of the governing instrument of a statutory trust.

Sections 5 through 11. These Amendments make certain technical and conforming changes to the sections of the Act regarding the execution and filing of certificates.

Sections 12 through 15. These Amendments provide the flexibility with respect to merger, consolidation and conversion of statutory trusts.

Section 16. This Amendment confirms the treatment under Delaware law of statutory trusts that have converted to other business entities.

Section 17. This Amendment provides for the transfer or domestication of statutory trusts and other business entities in and out of the State of Delaware

Section 18. This Section provides that the proposed Amendments of the Act shall become effective on August 1, 2004.

Quoted text of House Bill 463 is available here.

Full text of the bill is available in Word format at the bottom of the page.
Alan
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