See: General Partner (for the Silicon Valley venture capital flavor). But the more general general partnership definition runs like this:
Investment money is raised from limited partners. In theory, the general partnship is legally liable for any and all things that go wrong. In practice, before raising a dime, there are oceans of paperwork waiving any real liability to the general partners' flow, and nobody sues nobody for nothin'.
Related or Semi-related Video
Finance: What is a Master Limited Partne...3 Views
Finance Allah Shmoop What is a master Limited partnership or
MLP are multi It's just an LLC that is a
well generally publicly traded like every now and then in
a huge bull market an investment company goes public A
VC firm a private equity firm the firm and even
more popular Mlps helped the energy sector do things more
efficiently And in fact most MLP is living in and
around the energy sector That's kind of why they were
how they were designed legally to make that fool sector
a little more efficient financially Most of them started out
a small dozen member Elsie's with limited partners who gave
the general partners money to invest just like when they
were private and as when they were private profits weren't
taxed until they were distributed to the partners as ash
So then why did they want to become a mope
in the first place Well liquidity The firm itself was
doing really amazingly well and each partner wanted to get
cashed out at a big multiple of earnings as if
his seat in the partnership was worth being valued as
a business rather than just as a product And that's
how the enormous mutual fund feast and merchant bank Blackstone
started and ended as it is now a publicly traded
behemoth Same deal with Franklin Funds T Rowe Price in
a bunch of other professional partnerships which wanted its key
partners to be able to get liquid sell their holdings
and pay for divorces one into and have dough left
over for that convertible red portion with e upgraded wheel
rims Okay well an MLP does not pay taxes Profits
instead are passed through the individual partners who then pay
ordinary income tax on whatever they get And yes it's
generally ordinary income tax Sometimes they could make it be
long term gains but that's way more complicated for what
we need to worry about For now that is an
ML fee and so is this mutton lettuce pepperoni Delicious 00:01:56.34 --> [endTime] Yeah no
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