Incentive Distribution Rights - IDRs

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.

RELATED TERMS
  1. Limited Partner

    A partner in a partnership whose liability is limited to the ...
  2. General Partner

    Owners of a partnership who have unlimited liability. A general ...
  3. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  4. Schedule K-1

    A tax document used to report the incomes, losses and dividends ...
  5. Partnership

    A business organization in which two or more individuals manage ...
  6. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There ...
Related Articles
  1. Investing

    MLPs and Limited Partnerships: How They Differ

    Limited partnerships and master limited partnerships have one difference that makes all the difference.
  2. Markets

    What is a Partnership?

    A partnership is an organization where two or more owners operate a business.
  3. Personal Finance

    What's the Purpose of IRS Form 1065?

    Business partners need the information on this form to complete their own tax returns. Here are the details.
  4. Investing

    What is Carried Interest?

    Carried interest is the percentage of a private equity or a hedge fund’s profits that its general partners receive as compensation.
  5. Investing

    Limited Liability Partnership (LLP): The Basics

    LLPs are a flexible legal and tax entity that allows partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.
  6. Financial Advisor

    How To Create A Business Succession Plan

    Make sure the business you built continues to thrive long after you've left the helm.
  7. Investing

    Understanding Incremental Cash Flow

    Incremental cash flow is the additional operating cash flow an organization expects to generate from a new project.
  8. Managing Wealth

    Protect Your Personal Assets

    A family limited partnership (FLP) can go a long way toward securing your family's property.
  9. Investing

    Find The Right Fit With Probability Distributions

    Discover a few of the most popular probability distributions and how to calculate them.
  10. Investing

    What a Normal Distribution Means

    Normal distribution describes a symmetrical data distribution, where most of the results lie near the mean.
RELATED FAQS
  1. How are the profits split between a general partner and a limited partner in a real ...

  2. What's the difference between limited liability partnership and general partnership?

    Learn the differences between general partnerships and limited liability partnerships; each type has unique traits, benefits ... Read Answer >>
  3. What is the difference between a silent partner and a general partner?

    Understand the difference between a person designated as a silent partner and a general partner under the partnership business ... Read Answer >>
  4. Which terms should be included in a partnership agreement?

    Understand what specific terms should be included in a business partnership agreement and how each affects the partners in ... Read Answer >>
  5. Can I buy insurance to reduce unlimited liability in a partnership?

    Find out why it is important to safeguard your general partnership in the even that one member becomes disabled, dismembered ... Read Answer >>
  6. Can I elect to NOT have income tax withheld from an IRA (NOT ROTH) distribution before ...

Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center