Incentive Distribution Rights - IDRs

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DEFINITION of 'Incentive Distribution Rights - IDRs'

These give a limited partnership's general partner an increasing share in the incremental distributable cash flow the partnership generates. This occurs alongside of per-unit distribution increases to the limited partners. The general partner's share of incremental distributable cash flow usually starts at 2% and climbs to higher levels such as 20% or 50%.

BREAKING DOWN 'Incentive Distribution Rights - IDRs'

These rights are thought to motivate the general partner to rapidly grow the distributions to the limited partners. Incentive distribution rights are generally determined based on quarterly distribution figures.

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RELATED FAQS
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    Joint ventures are a very specific type of business arrangement. They can be organized in several different legal structures, ... Read Full Answer >>
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    Partnership insurance is actually quite common. Most of the time, partners buy insurance to safeguard against the possibility ... Read Full Answer >>
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    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
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    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  5. What is the difference between a silent partner and a general partner?

    Business structures provide benefits to business owners and entrepreneurs. In the small business arena, the most common business ... Read Full Answer >>
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