Under the proposed regulations, an individual who is a service partner in a service partnership may not be a
limited partner.
To avoid the adverse tax result of Hacki, FLP agreements should require annual distributions, provide
limited partners with the ability to sell their interest without the consent of the general partner and allow the partnership's liquidation only pursuant to state law.
Of course, the directors can be made up of the same people (or some of them) who are
limited partners, thereby placing some control over the limited partnership business back into the hands of the
limited partners; but, as you can see, things begin to get complicated, especially where issues of limited liability arise.
The individual may be treated as a
limited partner with respect to a certain class of ownership if other individuals treated as
limited partners under the general, rules own a substantial, continuing interest in such class of ownership and the individual's rights and obligations as to that class of ownership are identical to those held by the other
limited partners.
If substantially all a partnership's activities involve performing services in the fields of health, law, engineering, architecture, accounting, actuarial science or consulting, any individual who provides services as part of that trade or business is not considered a
limited partner.
The board is committed to implementing a new voting process that will be consistent with the original goal of giving each
limited partner a meaningful right to vote in the election of directors.
For this reason, the taxpayer's relationship to the LLC was analogous to that of a
limited partner to a limited partnership.
The proposed regulations contradicted the normal approach of permitting a person who was both a general and
limited partner to bifurcate his distributive share of LLC income and exclude the
limited partner interest portion from SE tax.
Restructuring Corvette City from a general partnership to a limited partnership and exchanging Dick's general partner interest for a
limited partner interest could accomplish the goal of limiting Dick's risk of loss to sums he invested in Corvette City.
75 million common
limited partner units in Atlas Pipeline Partners, L.
In the FSA, the partnership agreement provided that the entity would continue for 50 years or until the general partner and more than 50% of the
limited partner interests agreed to termination.
Limited partner ownership and participation restrictions are irrelevant to LLCs, which offer more favorable tax attributes than limited partnerships and avoid the restrictions of S corporations.
