1.2.2.2. Public Limited Partnerships on the Secondary Market
A limited partnership that is publicly offered but is not readily tradable goes by the more generic name of public limited partnership. A public limited partnership (PLP) is registered with the SEC and available to be traded through broker-dealers, though trading is rare. It can have an unlimited number of partners, though its membership is often less than 100.
Unlike REITs and PTPs, which acquire and develop properties mostly to keep in their portfolios, a public limited partnership sells its properties when development has been completed and the program is terminated. It is usually an investment fund, rather than an active business. To achieve “pass-through” status for tax purposes, it must meet the same requirements as a PTP, except that public limited partnerships cannot be traded on an exchange, and they are not “readily tradable on the secondary market.”
The absence of a ready market means that PLPs are not regularly quoted anywhere on an exchange or over the counter. The market for PLPs generally consists of about a dozen independent broker facilitators who try to match buyers and seller when requested.
A public limited partnership can only be a DPP when it limits any over-the-counter activity to the posting of non-firm prices or indications of interest. Quotations must be placed by a broker-dealer, who will facilitate the trade.
The most common type of p