Publicly Traded Partnership (PTP)

When you launch a new venture, you have a few choices about the organization you create to run your business. Of course, the first step is to come up with a clever name. Then you have to design a logo, pick out colors, and come up with a pithy slogan. Somewhere down the line, you should really work out the details of the good or service you plan to provide, and all that other blah blah blah, yada yada. Oh, and you've got to figure out the legal structure as well.

One of the key choices involves whether to organize as a partnership and corporation. There are various legal and tax implications of the decision. For our purposes here, it's enough to note that most of the entities that trade their shares publicly are organized as corporations.

However, it is possible to have a partnership with publicly floated stock. Hence, the name "publicly traded partnership." The organization is treated like a partnership for tax purposes, but has its shares traded publicly on an exchange.