Legal Definitions - master limited partnership

A master limited partnership is a type of partnership where the interests or shares are publicly traded. It is a limited partnership that allows investors to buy and sell shares in the partnership on a public exchange. This type of partnership is commonly used in the energy and natural resources industries.

For example, a company that owns oil and gas pipelines may form a master limited partnership to raise capital by selling shares to the public. Investors can buy and sell these shares on a stock exchange, just like they would with stocks in a corporation.

Master limited partnerships offer tax advantages to investors, as they are not subject to corporate income tax. Instead, the partnership's income is passed through to the individual investors, who pay taxes on their share of the income.