As a Texas business owner, you have worked hard to build your company, and now it is time to start thinking about your legacy. A family limited partnership allows you to protect your business assets from liability, provide for your family and secure the future of your company even in the event of your retirement, death or incapacitation.
According to FindLaw, despite the name, you do not have to transfer interests in an FLP to family members. You may choose to make gifts of interests in the FLP only to kin to keep a family-owned company intact, but you are at liberty to choose whomever you want to receive investments and other interests.
Once you transfer interest(s) in your company to someone else, that person becomes a limited partner. This is different than a general partner who has a say in the day-to-day operations of the business. All partners, whether limited or general, share in the profits, but limited partners have very few rights otherwise to engage in decisions in regard to managing the company. This can be beneficial to both limited partners and you: your limited partners bear no responsibility for business liability, you get to maintain control of your company and all of you reap the financial rewards.
Eventually, whether by choice or by necessity, you will no longer be the one running your business. Making a business succession plan in preparation is the responsible thing to do, and a family limited partnership can help. You can direct that a limited partner assume your role as general partner of the FLP in the event that you retire, become too disabled to carry on the business or pass away.
The information in this article is not intended as legal advice but provided for educational purposes only.
