1
00:00:00,719 --> 00:00:03,933
Tilden Moschetti: One piece of
lingo you oftentimes hear in the

2
00:00:04,004 --> 00:00:08,504
syndication world is the phrase
GP or LP, or general partner or

3
00:00:08,575 --> 00:00:12,932
limited partner. What are these
mean and how do they apply to

4
00:00:13,003 --> 00:00:17,146
you? Well, my name is Tilden
Moschetti. I am a syndication

5
00:00:17,218 --> 00:00:20,717
attorney with the Moschetti
Syndication Law Group

6
00:00:20,789 --> 00:00:25,146
specializing in Regulation D
Rule 506b and 506c offerings. We

7
00:00:25,217 --> 00:00:29,431
are going to go through what
that phrase what those phrases

8
00:00:29,503 --> 00:00:32,360
mean the definitions and how
they apply.

9
00:00:44,790 --> 00:00:49,544
Use of the term GP or LP, which
stands for GP general partner,

10
00:00:49,621 --> 00:00:53,916
or LP limited partner, are
actually an anachronism I say

11
00:00:53,993 --> 00:00:58,594
it's an anachronism because it
refers to a structure under a

12
00:00:58,671 --> 00:01:03,503
LP, which is a form of which is
a organization that set up as a

13
00:01:03,579 --> 00:01:08,027
limited partnership. Limited
Partnerships still exist, and

14
00:01:08,104 --> 00:01:12,706
they're still very useful under
very specific circumstances.

15
00:01:12,782 --> 00:01:17,307
However, most people who are
doing syndications and private

16
00:01:17,384 --> 00:01:21,909
offerings have moved away from
doing LPs. And I've moved to

17
00:01:21,985 --> 00:01:25,820
putting their their projects,
their assets and the

18
00:01:25,897 --> 00:01:30,728
opportunities in LLC is limited
liability companies. The reason

19
00:01:30,805 --> 00:01:35,407
is, is that over time, investor
sentiment itself has shifted

20
00:01:35,483 --> 00:01:40,008
that need to so that investors
could feel more secure about

21
00:01:40,085 --> 00:01:44,993
what their own rights were in an
LLC, rather than an LP. So a GP

22
00:01:45,070 --> 00:01:49,671
or the general partner is you,
you are the sponsor of it. So

23
00:01:49,748 --> 00:01:54,196
it's you who have some liability
as it relates to the fund

24
00:01:54,273 --> 00:01:59,028
itself, you know, how it works
and how it functions. So when I

25
00:01:59,105 --> 00:02:03,553
say GP, sometimes I'm talking
most of the time I'm talking

26
00:02:03,630 --> 00:02:07,848
about the manager are the
sponsor, they're all the same

27
00:02:07,924 --> 00:02:12,756
person. So the GP is that person
who's kind of in charge of it,

28
00:02:12,833 --> 00:02:17,358
they have some liability, but
they're the ones who also are

29
00:02:17,434 --> 00:02:21,959
profiting from some of the all
the work that they're doing.

30
00:02:22,036 --> 00:02:26,561
They're actively engaged in the
syndication, or in the fund

31
00:02:26,637 --> 00:02:31,239
itself. LP are the investors, so
the LP limited partners. So

32
00:02:31,316 --> 00:02:35,764
they're the people who have
basically no liability at all,

33
00:02:35,840 --> 00:02:40,519
except to the extent of the cash
that they've invested in the

34
00:02:40,595 --> 00:02:45,120
Fund, or into the syndication.
So that's the limit of their

35
00:02:45,197 --> 00:02:49,722
liability. And then they are
then completely passive in the

36
00:02:49,799 --> 00:02:54,247
role in the way that most
limited partnerships are set up,

37
00:02:54,323 --> 00:02:59,308
or nearly all of them is so that
LPS have no voting rights and no

38
00:02:59,385 --> 00:03:03,833
control whatsoever. An LLC may
have some voting rights for

39
00:03:03,910 --> 00:03:08,818
their investor members, but not
always. So there always needs to

40
00:03:08,895 --> 00:03:13,343
be some voting rights available,
but it will be very, very

41
00:03:13,420 --> 00:03:17,791
curtailed to much less. So
that's what a GP is, and an LP

42
00:03:17,868 --> 00:03:21,856
is and how they fit into
syndication. So yes, we use

43
00:03:21,933 --> 00:03:26,841
those terms. They're not actual
constructs within an LLC itself,

44
00:03:26,918 --> 00:03:31,673
but we do create the scaffolding
around it to create basically

45
00:03:31,749 --> 00:03:36,658
the same type of thing. And for
short, most of the time you will

46
00:03:36,734 --> 00:03:41,489
hear a syndicator sponsor or an
attorney talking about a GP or

47
00:03:41,566 --> 00:03:46,014
an LP role. My name is Tilden
Moschetti. I'm a syndication

48
00:03:46,091 --> 00:03:50,692
attorney with the Moschetti
Syndication La. Let me know if I

49
00:03:50,769 --> 00:03:51,690
can help you