Question

When Beck joined his uncle's oil exploration company in east Texas, he was given several hundred shares of stock in the firm, and was officially made a partner. The firm's accountant explained that the company paid taxes the same way as regular partnerships, by passing the profits through to each partner. Beck could purchase more shares of the company on a public stock exchange, as long as someone was willing to sell his/her shares. This firm was likely a special form of ownership called a __________.a. master limited partnership
b. limited partnership
c. generally acceptable partnership
d. strategic alliance

Answer 1

Answer:

Master limited partnership.

Explanation:

Master limited partnership is also called publicly traded partnership and is a publicly traded entity that is taxed as a partnership.

There is a combination of tax advantage of a partnership and the ability of the form to get funding by issuing securities.

To get tax benefits the business should generate at least 90% of their profit from qualified processes such as processing, production, storage, transportation, and real property rents.

Beck was given several hundred shares of stock in the firm, and was officially made a partner. The firm's accountant explained that the company paid taxes the same way as regular partnerships, by passing the profits through to each partner. Beck could purchase more shares of the company on a public stock exchange, as long as someone was willing to sell his/her shares.

This is a master limited partnership.