10 MLP Governance Facts


MLPs possess unique governance characteristics as compared to corporations.The number of master limited partnerships (MLPs) has grown significantly over the past five years, increasing from 59 in 2009 to over 100 in 2013. An MLP is a partnership or limited liability company that is traded on a stock exchange. In contrast to corporations, partnerships generally do not pay federal income tax at the entity level. However, publicly traded partnerships are taxed as corporations unless 90 percent of the gross income is “qualifying income.” The most prominent category of qualifying income relates to natural resources activities.

This article examines the unique governance characteristics of MLPs.

1. General Structure An MLP has both limited partners and a general partner. The general partner possesses the exclusive management powers over the business and affairs of the MLP and the Board of Directors is typically at this level. Directors owe duties to the MLP and all of its unitholders (including the sponsor) under the MLP’s partnership agreement.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Latham & Watkins LLP | Attorney Advertising

Written by:


Latham & Watkins LLP on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.