the main adv of family limited partnership - ability to transfer

family Limited Partnership (FLP)

A Family Limited Partnership, or FLP, is a limited partnership in which ownership is restricted to a confined group—family members. This aspect differs from other types of partnerships and corporations where transfers of interest are unrestricted or are publicly traded. The FLP is a valuable tool for centralizing management of a family business and passing limited partnership interests to the next generation.

A Family Limited Partnership is formed with a written Partnership Agreement. Provisions in the partnership agreement can restrict how or if partnership interests are transferred, sold, or encumbered. The FLP consists of general voting partners and limited non-voting partners. Typically, the senior generation acts as the general partners for the FLP and maintains control over partnership activities. The younger generation enters the partnership as limited partners, who hold an ownership interest in the partnership but little or no management authority. Eventually, limited partners transition to general partners.

Advantages of the FLP include:

* limiting ownership interests to family members,
* allowing for an incremental and smooth transfer from one generation to the next,
* having the ability to transfer partnership interests free of gift tax, and
* providing limited financial liability for limited partners.

An FLP must be registered with the state

所有跟帖： 

• 有一利必有一弊 搞不好弄巧成拙 -baysouth- ♂ (346 bytes) () 06/07/2009 postreply 21:07:32

• haha, good discussion, I totally agree the 2 disadvantage -jy101- ♂ (418 bytes) () 06/07/2009 postreply 21:37:27