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Trust (business)

A type of a business group designed to reduce competition in a market / From Wikipedia, the free encyclopedia

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A trust or corporate trust is a large grouping of business interests with significant market power, which may be embodied as a corporation or as a group of corporations that cooperate with one another in various ways. These ways can include constituting a trade association, owning stock in one another, constituting a corporate group (sometimes specifically a conglomerate), or combinations thereof. The term trust is often used in a historical sense to refer to monopolies or near-monopolies in the United States during the Second Industrial Revolution in the 19th century and early 20th century. The use of corporate trusts during this period is the historical reason for the name "antitrust law".

The Rockefeller-Morgan Family Tree (1904), which depicts how the largest trusts at the turn of the 20th century were in turn connected to each other.

In the broader sense of the term, relating to trust law, a trust is a centuries-old legal arrangement whereby one party conveys legal possession and title of certain property to a second party, called a trustee. While that trustee has ownership, they cannot use the property for herself, but holds it 'in trust' for the well-being of a beneficiary. Trusts are commonly used to hold inheritances for the benefit of children and other family members, for example. In business, such trusts, with corporate entities as the trustees, have sometimes been used to combine several large businesses in order to exert complete control over a market,[1] which is how the narrower sense of the term grew out of the broader sense.

In the United States, the use of corporate trusts died out in the early 20th century as U.S. states passed laws making it easier to create new corporations.