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Within partnership arrangements, Family Limited Partnerships are frequently used to move wealth from one generation to another. Partners are either General Partners or Limited Partners. One or more General Partners are responsible for managing the FLP and its assets. Limited Partners have an economic interest in the FLP, but typically lack two noteworthy rights: control and marketability. Limited Partners have no ability to control, direct, or otherwise influence the operations of the FLP. They can neither buy additional assets, nor sell existing assets, and they cannot act on the Partnership's behalf. They also substantially lack the ability to sell their interest, with one typical exception: transfers to immediate family members. FLPs are partnerships limited to family members, hence the name.
FLPs are typically holding companies, acting as an entity that holds the property contributed by the members.