How Flow-Through LPs Work
The advantages of the Limited Partnership
A "Limited Partnership" is a kind of legal structure for a fund. Investors purchase units in the Limited Partnership. Companies issue flow-through shares to the Limited Partnership. Companies renounce expense deductions to the Investors in the Limited Partnership. A Limited Partnership provides a tax write-off in the year of investment of a set percentage of the total investment.
Within 2 years:
Subject to prevailing legislation, investors may be offered liquidity through a tax deferred exchange into a mutual fund.
Limited Partners become unitholders in the mutual fund.
Flow-Through LP Historic Performance