Business Purpose Doctrine
/ˈbɪznɪs ˈpɜːrpəs ˈdɒktrɪn/
Definitions
- (n.) A principle in corporate and tax law requiring business transactions to have a legitimate and substantial business purpose beyond tax avoidance or legal formalities.
The court applied the business purpose doctrine to invalidate the shell company's transaction.
Forms
- business purpose doctrine
Related terms
See also
Commentary
This doctrine helps courts distinguish genuine business arrangements from those used solely to evade taxes or regulatory requirements.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.