Limited partnership structure

@@ -33,9 +33,7 @@ corporate subsidiary structure.
  the limited partners; the limited partners are passive investors with economic rights but
  no management authority.
- Income and loss flow through the limited partnership to the partners in proportion to their
  unit holdings; the partnership itself does not pay income tax, and partners receive T5013
  information slips for their proportional share of partnership income and loss for each
  fiscal year.
  unit holdings; the partnership itself does not pay income tax.

## The limited partnership form

@@ -62,15 +60,15 @@ subject to a short, enumerated list of grounds on which the general partner may 
specific transfer, and the governance procedures for material decisions.

The transfer provisions of the agreement implement the [[equity-transfer-model|equity transfer model]]:
limited partners may transfer their units to any eligible counterparty, subject only to
compliance with applicable securities law exemptions and the eligibility representations
each transferee makes. The general partner may decline a specific transfer only where counsel
opines it would violate securities or other law, or where the general partner believes those
representations are untrue — otherwise it is contractually obligated to admit the transferee,
and it updates the unit register to record the transfer. A separate, narrower mechanism can
require a holder to divest if their status would create adverse tax consequences for the
partnership, and an acquisition crossing 20% of outstanding units triggers a mandatory-offer
requirement rather than an ordinary transfer.
the general partner admits any transferee as a limited partner, subject to the transferee
completing the required transfer documentation and the representations set out in the
partnership agreement. If the general partner becomes aware that beneficial owners of 45%
or more of the outstanding units are, or may be, financial institutions, it has the right
to refuse to issue or register a transfer of units to a person unless that person confirms
it is not a financial institution. A separate mechanism can require a holder to divest if
their status would create adverse tax consequences for the partnership, and an acquisition
crossing 20% of outstanding units triggers a Take Over Bid mandatory-offer requirement
rather than an ordinary transfer.

## Covenant waiver and amendment mechanics

@@ -93,24 +91,12 @@ account is adjusted each fiscal year for the partner's proportional share of par
income or loss (per the allocation provisions of the partnership agreement) and for any
distributions received.

The capital account rollforward — tracking changes from opening to closing — is the primary
tool for computing each partner's adjusted cost base for income tax purposes. The T5013 slip
issued to each partner at the end of the fiscal year includes the information required to
complete the capital account rollforward in the partner's personal or corporate tax return.

## Pass-through income treatment

A limited partnership is not a taxable entity for Canadian income tax purposes. The income
and loss of the partnership pass through to the partners and are taxed at the partner level
in proportion to each partner's unit holdings. This treatment avoids the corporate-level
tax on operating income that applies in a corporate subsidiary structure, and allows
investors to use their proportional share of partnership losses (if any) against other
income to the extent permitted by applicable tax legislation.

Passive losses from a limited partnership — in excess of passive income allocated from the
same partnership — are generally restricted under the Income Tax Act's at-risk rules; the
specific application depends on each investor's circumstances and is a matter for qualified
tax counsel.
in proportion to each partner's unit holdings. The tax treatment of any partnership loss
depends on each investor's own circumstances and is a matter for qualified tax counsel.

## Reporting issuer status