Master Limited Partnership

I was recently asked to put on some information on the Master Limited Partnership or MLP.
A MLP is a highly regulated entity by U.S. code that is a LP that is publicly traded on a securities exchange. It combines the tax benefits of a LP with the liquidity of publicly traded securities.
They apply to businesses engaged primarily in, for example, natural resources, like petroleum and natural gas extraction and transportation. Certain types of real estate entriprises may qualify also.
In practice, MLP’s pay their investors through quarterly required distributions (QRD), the stated amount in the contract between limited partners (investors) and the general partner or manager.
Failure to pay may constitute an event of default.
Because of these restrictions, the majority of MLP’s are pipeline companies which earn stable income from transport of natural gas, oil and gasoline.
Because they are partnerships, they avoid corporate income tax, both state and federal. Partners may also record a pro-rated share of the MLP’s depreciation on his/her own tax forms to reduce liability.
Because of all the stipulations, you would not attempt this entity without the help of a qualified attorney.
Hope this helps