A New Structure for MLP Roll Ups?

A structure that a manager of private equity and hedge funds plans to use to take the company public may open the door to "roll ups" of wind farms, ethanol plants, solar facilities and other projects that have had trouble using master limited partnership structures

A master limited partnership is a limited liability company or partnership with units that are traded on a stock exchange or over-the-counter market.

A business structured as an MLP has several advantages over other forms of business.

First, its earnings are subject to only one level of income tax.In contrast, income earned by a corporation is taxed twice: once to the corporation and again to shareholders when the earnings are distributed as dividends. Second, unlike other partnerships, MLP units are liquid and can be sold more easily. This allows businesses organized as MLPs to raise equity more cheaply. Investors are willing to pay extra for the ability to exit the business freely. Third, an MLP has a currency — MLP