A limited partnership owned by family members is referred to as a family limited partnership or "FLP". A limited partnership has two types of partners, a general partner, and a limited partner. The general partner manages the partnership and is liable for all business affairs. Limited partners are not generally liable for partnership debts but cannot participate in management. Family LPs are used for a range of matters, including owning and operating a family business or investment. An advantage of FLPs is that a parent can serve as general partner and control all business matters (subject of course to his or her fiduciary responsibilities). FLPs have been used by many to secure discounts on valuation of FLP interests for gift and estate tax purposes.
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