partnership
noun
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Definition of partnership
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Synonyms & Antonyms for partnership
Synonyms
affiliation, alliance, association, collaboration, confederation, connection, cooperation, hookup, liaison, linkup, relation, relationship, tie-up, union
Antonyms
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Examples of partnership in a Sentence
Recent Examples on the Web
Next week's performance is an early sign of how the NFL's partnership with Jay-Z, forged over months of discussions, may work. — Jonathan Landrum Jr., chicagotribune.com, "Meek Mill and Meghan Trainor will perform at a free concert in Grant Park before the Bears season opener," 30 Aug. 2019 The songs tend to flow into each other, although Antonoff and Del Rey’s partnership does result in some lovely musical moments. — Maura Johnston, EW.com, "Lana Del Rey cuts through the gloom on Norman F—ing Rockwell," 30 Aug. 2019 Recall that Jolie was spurred to file for divorce and to end the couple’s glamorous, globe-trotting partnership after Pitt got into some kind of altercation with their oldest son Maddox, 18. — Martha Ross, The Mercury News, "How Brad Pitt has wrestled with ‘toxic masculinity’ since his split from Angelina Jolie," 30 Aug. 2019 Dicus leads a global team focused on delivering best in class artist marketing campaigns, industry support and partnerships. — Hannah Malach, Billboard, "Executive Turntable: Moves at Songtrust, Dualtone, Monument Records & More," 30 Aug. 2019 San Diego grocery delivery startup Mercato, which makes an app for shoppers to order goods from small and indie grocers, has signed a partnership deal with San Francisco food delivery giant DoorDash. — Brittany Meiling, San Diego Union-Tribune, "San Diego’s grocery delivery startup Mercato inks deal with DoorDash," 29 Aug. 2019 That said, striving for a partnership system does not mean leaving everything about capitalism and socialism behind. — Riane Eisler, Quartz, "The fight between capitalism and socialism will be won by a totally different “ism”," 29 Aug. 2019 Ring has for months sought to keep key details of its police-partnership program confidential, but public records from agencies across the country have revealed glimpses of the company's close work with local police. — Drew Harwell, Anchorage Daily News, "Doorbell-camera maker Ring has partnered with 400 police forces, extending surveillance reach," 28 Aug. 2019 And last Friday, Boulder’s Avery Brewing launched its partnership brew with CU, the Stampede Colorado gold lager. — Joe Nguyen, The Know, "Rocky Mountain Showdown, beer edition: Which beer is better, CU’s Stampede or CSU’s Old Aggie?," 27 Aug. 2019These example sentences are selected automatically from various online news sources to reflect current usage of the word 'partnership.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for partnership
partnership
nounFinancial Definition of partnership
What It Is
A partnership is a business structure in which the owners (partners) share with each other the profits and losses.
How It Works
A partnership is organized to provide for proportional ownership of a company among the partners based on some type of formula or value of investment in the company. Partnerships pass along the profit (and losses) to its owners and offer tax advantages to the company. The partnership, itself, for example, does not incur taxes on its profits before the profits are distributed to the partners. Each partner in the partnership pays taxes on the distributions based on their individual tax rate. At the same time, with the liability shield of a corporation, partners may be exposed to a greater degree of personal liability in a partnership.
Additional forms of partnerships have been developed which limit the extent of partner’s liabilities. Limited partnerships which give partners protection from liability and, at the same time, limit their control of the company. A limited liability company gives some, but not complete protection from liability and allows the partners to maintain control over the company.
Also, not all partners are equal. General partners, for example, usually have direct control over the operations of a company. With that control, general partners have joint and several liabilities. Limited partners, on the other hand, have liabilities that are limited to their investment in the partnership.
Why It Matters
In most legal systems, a partnership is a legal form of a company in which all partners, to some extent, are personally liable for its debts and obligations. Because the partnership itself does not pay income taxes, it passes that obligation to individual partners. As a result, partners are liable for taxes of the profits from their share of the partnership. Also, if it is applicable, partners must file estimated taxes on their share, showing income and deductions, on a quarterly basis.
Source: Investing Answers
master limited partnership
nounFinancial Definition of master limited partnership
What It Is
A master limited partnership (MLP) is a publicly traded limited partnership. Shares of ownership are referred to as units. MLPs generally operate in the natural resource, financial services, and real estate industries.
How It Works
Unlike a corporation, a master limited partnership is considered to be the aggregate of its partners rather than a separate entity. However, the most distinguishing characteristic of MLPs is that they combine the tax advantages of a partnership with the liquidity of a publicly traded stock.
MLPs allow for pass-through income, meaning that they are not subject to corporate income taxes. Instead, owners of an MLP are personally responsible for paying taxes on their individual portions of the MLP's income, gains, losses, and deductions. This eliminates the "double taxation" generally applied to corporations (whereby the corporation pays taxes on its income and the corporation's shareholders also pay taxes on the corporation's dividends).
MLPs make distributions that are similar to dividends, and these are generally paid out on a quarterly basis. It is important to note that cash distributions are not guaranteed, and every unitholder is responsible for the taxes on his or her proportionate share of income, even if the MLP does not pay a cash distribution.
Generally, investors can purchase MLP units from brokers. A unitholder's initial tax basis in MLP units is generally the amount he or she pays for the units. The unitholder's basis is usually then decreased with each distribution and allocation for losses or deductions, and the basis is increased for each allocation of income. A portion of certain distributions may qualify as a return of the investor's capital, thereby reducing the unitholder's taxable basis.
When an MLP pays more in distributions than it earns in taxable income, the unitholder's tax basis is decreased by the difference between the cash received and the MLP's taxable income. When the unitholder sells his or her units, any gain on the sale is taxed at the unitholder's ordinary income tax rate.
MLPs must mail an IRS Schedule K-1 to each of their unitholders every year. This Schedule K-1 reports the unitholder's allocated income, gain, loss, deduction, and credits. If the unitholder's taxable partnership income for the year is negative, then this is considered a passive loss under the tax code and may not be used to offset income from other sources. Instead, the passive loss may only be used to offset future income from the same MLP.
Although unitholders are generally limited in their liability, similar to a corporation's shareholders, creditors typically have the right to seek the return of distributions made to unitholders if the liability in question arose before the distribution was paid. This liability stays attached to the unitholder even after he or she sells the units.
Why It Matters
The fact that master limited partnerships are not subject to income tax means that more cash is available for distributions than would be available had the company incorporated. This generally makes MLP units worth more than similar shares of a corporation.
The size of an MLP's cash distributions generally drives the value of its MLP units. With this in mind, it is particularly important for investors to carefully evaluate whether an MLP is able to meet its current distribution obligations and whether it will be able to continue (and possibly even raise) its future distributions. If a particular ir sports a distributable cash flow coverage ratio of 1:1, then this generally indicates that the MLP has adequate cash to meet its cash distribution requirements.
As a side note, the American Jobs Creation Act of 2004 added MLP income to the list of acceptable sources of income for mutual funds, with some conditions, including that mutual funds may not invest more than 25% of their assets in MLPs, nor may they own more than 10% of any one MLP.
Before you put a dime in MLPs, be sure to take the time to read one of our most popular articles on the topic: Master Limited Partnerships: A High-Yield Favorite for Growing Dividends. There you'll find more information about what to expect from these securities when you invest.
Source: Investing Answers