The GP/LP (General Partner/Limited Partner) structure is one option for Canadian real estate businesses looking to grow. If you’re looking to found, or invest in, a GP/LP, and exploring real estate opportunities in Canada, this ultimate guide demystifies:
- what it is
- the elements of the structure
- pros and cons for founders and for investors
- the tax advantages, such as flow-through, of the GP/LP,
- why growth into a REIT is one possibility
- how to set up this structure
- who should consider it
A GP refers to the General Partner, which represents the founders or owners of a real estate project, responsible for managing the project. On the other hand, LP stands for Limited Partners or Limited Partnership, consisting of investors who provide the majority of funds for the project. Limited partners are often higher net worth individuals seeking tax advantages, financing benefits, or specific reporting requirements.
In summary, the GP/LP structure in real estate investing involves a partnership between founders (GPs) and investors (LPs), providing benefits such as control, tax flexibility, flow-through taxation, and limited liability. While it may not be necessary for all investors, serious individuals involved in larger projects may find it advantageous to consider this structure in consultation with their advisors.
Ultimate Guide: The Chapters
Click on an article below to read or watch the video:
And, if you’re like some people, and want to take on the whole topic in one video, you can also go to our ultimate overview video, that combines all of different chapters into one. Click the video below to watch.
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Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
