What happens when a limited partner wants to sell his unit should be outlined in the Partnership agreement. If not, the legal rules of the State in which the Limited Partnership is registered will apply.
With respect to our business model, you may want to read the attached articles under URL:
EXECUTIVE SUMMARY ONCE TOUTED AS THE INVESTMENT vehicle of the future, limited partnerships are seldom pitched to investors today. Instead, clients and the CPAs who advise them are looking back at the tax and financial factors that contributed to the downfall of LPs in areas such as oil and gas,
www.journalofaccountancy.com
In addition to what you will find, there are two issues you have to be careful about:
"Calling for public money" and the "three out of five-year profitability requirement by the IRS". The first one is related to SEC rules. You have no problems when you are looking for business partners to join you in a partnership amongst your inner circles. When you start offering investment opportunities to the public, without being licensed under SEC rules, you crossed the line.
The IRS rule about the 3/5 year profitability is usually related to the question of whether you are running a business or try to declare a hobby as a business. But when your fundamental business concept is built on accumulating losses for tax savings purposes, the issue becomes tricky.
