Master limited partnership

Source: Wikipedia, the free encyclopedia.

In the

securities
.

To obtain the tax benefits of a

transportation of depletable natural resources and minerals. In addition, real property
rents also qualify.

The "MLP" and "PTP" terms are commonly used interchangeably, but MLPs are technically a type of limited partnership that conducts its operations through subsidiaries and are not always publicly traded. Most PTPs are organized as MLPs, but a PTP may be organized as a limited liability company that elects to be taxed as a partnership.[1]

History

In 1981,

basketball team
became an MLP.

Section 7704 of the Revenue Act of 1987 limited which businesses could be MLPs, delineating that an MLP must earn at least 90% of its

transportation, processing, storage, and production of natural resources and minerals
.

In the decades since the

IRS has issued Private Letter Rulings which further clarify and define which activities generate qualifying income
and which do not.

Structure

Like all

parties
.

MLPs pay their

partnership agreement, the distribution is typically defined as all available cash flow, less a reserve which is determined by the general partner. Typically, the higher the quarterly distributions paid to limited partners, the higher the management fee paid to the general partner. This provides the general partner with an incentive to maximize distributions through pursuing income-producing acquisitions and organic growth projects.[citation needed
]

In addition to the traditional governance

directors. This committee reviews specific matters as authorized by the board of directors that may involve conflicts of interest
.

Taxation

Because MLPs are not subject to

tax form
.

As a consequence of their

Types of MLPs

Energy MLPs

Because of the stringent provisions on MLPs and the nature of the quarterly required distributions, most MLPs operate oil, natural gas, or refined product pipeline businesses, which tend to generate more predictable income streams. However, many other assets can be operated in an MLP including processing plants, natural resource storage facilities, rail terminals, marine transportation vessels, and refineries, among others.

Examples of MLPs involved in the gathering, processing, compression, transportation and storage of oil and gas include Buckeye Partners, DCP Midstream, Energy Transfer Partners, Enterprise Products Partners, Magellan Midstream Partners, NuStar Energy, Plains All American Pipeline, TC PipeLines, and TransMontaigne Partners. A number of MLPs are dedicated to marine transportation, oil and gas exploration, oilfield services, and downstream refining/marketing/distribution services. MLPs also operate in the propane, coal and biomass industries.[4]

Financial MLPs

A number of companies in the finance, investment and real estate industries operate as MLPs, such as

Och-Ziff Capital Management.[4]

Other MLPs

Under the rents from

REITs or C corporations, a few, such as Cedar Fair, still exist.[4]

See also

  • German law
    .

References

  1. ^ National Association of Publicly Traded Partnerships. "Facts & Answers about Publicly Traded Partnerships" (PDF). Retrieved 2018-09-17.
  2. ^ Resonance Financial (May 28, 2014). "Master Limited Partnerships". RezFin.com. Retrieved July 19, 2015.
  3. ^ Lee Brodie (October 16, 2012). "Linn Energy Vs LinnCo: Cramer Sorts Out the Confusion". Cnbc.com. Retrieved June 3, 2013.
  4. ^ a b c "Lists of Current MLPs & MLP Funds – MLPA". www.mlpassociation.org. Retrieved 2018-09-17.

External links