New Investor’s Guide to Limited Partnerships

Family members often want to invest together by pooling their money in order to take advantage of investment opportunities that would not be suitable for small account sizes.  One of the most popular ways to achieve this is to form a family limited partnership.  This special type of investing vehicle provides tax advantages and a host of other benefits, and, as with other investment structures, limited partnerships have disadvantages of which you should be aware.  Let this introductory overview give you a basic understanding of what a family limited partnership is and how it may benefit your family.

A great technique for lowering estate taxes and gift taxes is to form a family limited partnership, consolidate your assets within it, and then give part of the partnership away to your heirs each year.  Unsurprisingly, this particular strategy is frequently used by successful and wealthy families.  In this in-depth article, I’ll help you understand how this fantastic strategy can work for you and your family.

If you understand what limited partnerships are, how they work, their advantages and disadvantages, and how they can benefit you and your portfolio, and you’re ready to create one of your own, where do you go? What do you do? It may be overwhelming at first, but starting a limited partnership is much easier than you may think!  With the right attorney or accountant and a few hundred or thousand dollars, you may be able to form your limited partnership in an hour or two.  For those of you contemplating forming your own limited partnership, I’ll explain two of the most popular ways to form a limited partnership in the United States.

If you are still unsure if forming a limited partnership is right for you, take a look at the article below for more information.

If you’ve read through the articles up to this point, by now you should have a basic understanding of what a limited partnership is, what it does, and a handful of its pros and cons.  To expand upon what you’ve learned, in this article I’ve compiled a list of six major benefits of forming a limited partnership.  By understanding what they are, you can better take advantage of this excellent investment structure.

One of the biggest drawbacks of using a limited partnership is that the person managing the investments, the general partner, has unlimited liability.  That means if they take on too much debt and things go bad, he or she is on the hook and could have all of their personal assets on the line.  Thankfully, a large number of states have created a special type of investment vehicle known as a limited liability limited partnership to avoid this problem.  In this article, I’ll walk you through what a limited liability limited partnership (LLLP) is and how it is used, along with its pros and cons.

Did you know that it is possible you have invested in limited partnership units and not shares of stock without even knowing it?  Sometimes, these limited partnership units (or LP units) trade on the open market and are often mistaken for shares of common stock.  When you log into your brokerage account to place a trade order, or when you call your broker with instructions to buy them, you or your broker actually buys LP units instead of shares of the common stock.  The tax consequences for such a mistake could be huge.  Find out just what is at stake…

Almost all hedge funds and private equity funds are structured as limited partnerships.  Because of their unique rules and regulations, only accredited investors and sophisticated investors are allowed to invest in a hedge fund.  If you have ever wanted to understand what a hedge fund is, what it does, how it earned its name, how its managers are paid, what accredited and sophisticated investors are, and more, this brief overview will help you build your educational foundation.