Limited Partnership Rules
What is a limited partnership?A limited partnership is a type of partnership that is very common when people need some sort of funding for their business or when they are forming an investment in a real estate. A limited partnership just like other partnerships requires a written agreement between the management which includes the general partner(s) and all the limited partners. Every limited partner will make an investment of the funds that are in the partnership and the limited partners are supposed to receive a pre-stated share of that profit. Each state has their own laws on the amount of limited partners for each partnership, this is done to prevent using interest in the limited partnership as if it was shares of stock in a corporation. A limited partnership may not have a name that is too close to another limited partnership or corporation. Read below where Experts have answered a few questions pertaining to a limited partnership.
What is a master limited partnership?A master limited partnership is defined as a limited partnership that openly traded on the securities exchange. A master limited partnership combines the tax benefits of a limited partnership with the liquidation of openly traded securities. These master limited partnerships are limited by the United States Code that only apply for an enterprise that connects with a certain business that mainly relates using natural resources.
What is a family limited partnership?A family limited partnership is used to move funds from one generation to another. Partners are either considered a general partner or a limited partner. General partners are responsible for running the family limited partnership but normally lack important rights such as control and marketability. A limited partner will have control or authority over the operations of the family limited partnership. These partners cannot buy more possessions, sell existing possessions and cannot take action on the partnership’s behalf. Family limited partnerships don’t have the ability to sell the interest with one exception which is transfers to immediate family members that include a spouse, siblings, children etc.
Limited partnership vs. LLC (limited liability company)A limited liability company and a limited partnership are very much alike. Both of these partnerships must be prepared and operated carefully to make sure that they are taxed as a partnership for the federal income tax purposes. Even though limited partnerships have been well known in the past there are many reasons why a limited liability company is not the business of chose. Often times it is recommended to make use of both a limited liability company and a corporation in order to accomplish the best of everything.
What are the steps in dissolving a limited partnership?When making the choice to dissolve a limited partnership there is some legal steps that need to be taken. The first step would be to over look the limited partnership agreement for any fine print on the necessary actions that need taken. The partner will need to look into all the creditors that were related with the limited partnership and notify them of the choice to dissolve. If there are any outstanding debts, those will need to be paid. The partner will then need to file a notice with the state as soon as possible. This process can take up to ninety days. If any contracts were signed for any service that was in affect before the termination of the partnership these contracts must still be honored. Finally the partner will need to hire a lawyer to review the dissolution actions that they have taken and to make certain that the partner has not missed any important steps or procedures.
A limited partnership can often time create some questions or problems when setting up a limited partnership. When in doubt don’t take the business law into your own hands contact the thousands of Experts who have had many years of experience in business law. These Experts can walk you through many problems and point you in the right direction by providing you with the correct answers.